Manjani & Rama
[2025] FedCFamC1F 186
•21 March 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Manjani & Rama [2025] FedCFamC1F 186
File number: MLC 5299 of 2022 Judgment of: HARTNETT J Date of judgment: 21 March 2025 Catchwords: FAMILY LAW – PROPERTY – De facto relationship – Where the de facto husband and wife seek an adjustment of property interests pursuant to s 90SM of the Family Law Act 1975 (Cth) (“the Act”) – Where there is a consideration of s 90SF(3) of the Act – Where the de facto husband operates a medical practice in which the de facto wife worked as a health professional – Where the medical practice manager is joined as the second respondent – Where the de facto wife’s sister alleges that she made significant contributions to the medical practice – Where the de facto wife’s sister is joined as the third respondent – Where the de facto wife has interest in real properties in the United Kingdom and Country T – Where the asset pool is disputed in part – Where the de facto husband and wife both made significant contributions to the asset pool – Where the third respondent’s case is without merit – Just and equitable division of assets is 55/45 per cent in the wife’s favour – Parties’ superannuation entitlements to be equalised Legislation: Family Law Act1975 (Cth) Pts VIII, VIIIAB, ss 79(2), 79(4), 90SF(3), 90SM
Evidence Act 1995 (Cth) s 140
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Bevan & Bevan (2013) FLC 93-545
Blandford & Esmore [2022] FedCFamC1A 67
Stanfordv Stanford (2012) 247 CLR 108
Division: Division 1 First Instance Number of paragraphs: 134 Date of last submissions: 12 July 2024 Date of hearing: 1-4 July 2024 Place: Melbourne Counsel for the Applicant: Mr Dunlop Solicitor for the Applicant: CE Family Law Pty Ltd Counsel for the Respondents: Mr Howe Solicitor for the Respondents: Cogent Legal Solicitor for the Respondents: Litigant in person Solicitor for the Respondents: Litigant in person ORDERS
MLC 5299 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR MANJANI
Applicant
AND: MS RAMA
First Respondent
MR ASTROM
Second Respondent
MS WILMS
Third Respondent
ORDER MADE BY:
HARTNETT J
DATE OF ORDER:
21 MARCH 2025
THE COURT ORDERS THAT:
1.All previous orders be discharged.
2.The parties do all acts and things and sign all documents as may be required to authorize and direct Australian Securities & Investments Commission (“ASIC”) to transfer to the Applicant for his sole ownership the whole of the funds held in Unclaimed Money being $223,291.50 OTN … from the deregistered company B Pty Ltd.
3.To facilitate the implementation of Order 2 hereof:
(a)The Applicant be permitted to provide ASIC and/or the National Australia Bank (“NAB”) with a sealed copy of these Final Orders and/or sealed copies of any previous Order made in these proceedings; and
(b)In the event the First Respondent fails to sign any documentation required by ASIC or the NAB within 14 days of receiving a request to do so from ASIC or the NAB and/or the Applicant, then the Applicant be appointed pursuant to Section 106A of the Family Law Act 1975 (Cth) (“the Act”) to execute any documents required in the name of the First Respondent and do any other acts and things as may be necessary to give effect to Order 2.
4.That within 7 days of the date of these Orders the Applicant and First Respondent do all such acts and things and sign all such documents as may be required to transfer to the Applicant the sum of $150,002 (“the transfer from the Offset account”) from the National Australia Bank Offset account number …00 (“the NAB Offset account”) and thereafter close the account.
5.That within 60 days of the date of these Orders the First Respondent make a payment to the Applicant the sum of $307,171.02 (“the payment”).
6.That contemporaneously with the whole of the payment being made pursuant to Order 5 hereof:
(a)The Applicant do all acts and things and sign all documents required to transfer all of his right, title and interest in the property located at C Street, Suburb D (“the Suburb D property”) to the First Respondent and/or her nominee(s) at the First Respondent’s cost and expense;
(b)The First Respondent pay out the home loan account number ending …31 and discharge the associated NAB mortgage secured against the Suburb D property (“the discharge”), or refinance the mortgage secured against the Suburb D property to release the Applicant from any and all liability in respect of any mortgage secured by that property, at her sole expense (“the refinance”); and
(c)The parties close all bank accounts styled in the joint names of the Applicant and the First Respondent.
7.In the event that:
(a)The First Respondent has refused, failed or neglected to do all things and sign all documents required to make the transfer from the NAB Offset account pursuant to Order 4 hereof; and/or
(b)The First Respondent has refused, failed or neglected to make the payment pursuant to Order 5 hereof; and/or
(c)The First Respondent has refused, failed or neglected to effect the discharge or refinance pursuant to Order 6(b) hereof;
then the parties shall do all things and sign all documents to forthwith sell the Suburb D property upon such terms and conditions as are agreed between the parties in writing and in default of agreement as nominated by the President of the Real Estate Institute of Victoria or his or her nominee (“the default sale”) and the proceeds of the default sale be applied as follows:
(i)First, to pay the selling agent's fees and commissions, marketing and/or advertising expenses of the default sale, legal expenses of the default sale, any fees payable to the President of the REIV and adjustment of usual outgoings;
(ii)Second, to discharge the mortgage affecting the Suburb D property;
(iii)Third, so much of the amount that is outstanding pursuant to Order 4 or 5 hereof to the Applicant together with penalty interest at the rate prescribed under the Federal Circuit Court and Family Court of Australia (Family Law) Rules 2021 (Cth) adjusted monthly from the date; and
(iv)Fourth, the balance to the First Respondent.
8.That pending compliance with Orders 5 and 6 hereof or the settlement of the default sale pursuant to Order 7:
(a)The First Respondent have the sole use and occupation of the Suburb D property;
(b)The First Respondent pay, and indemnify the Applicant, in relation to the Suburb D mortgage and all other outgoings for the Suburb D property, including but not limited to rates, insurances, utilities, maintenance and all apportionable outgoings of the Suburb D property as and when they fall due;
(c)Neither the Applicant or the First Respondent encumber or further encumber the Suburb D property without the consent in writing of the other;
(d)The First Respondent maintain the Suburb D property to a standard conducive to sale; and
(e)The Applicant and the First Respondent hold their respective interests in the Suburb D property upon trust for the other pursuant to these Orders.
9.That within 30 days, the First Respondent, whether in her personal capacity or in her capacity as an office holder, do all such acts and things and signs all such documents as may be required to:
(a)Transfer to the Applicant all shares and interest held by her or by any entity for which she is an officeholder and any monies or benefits owing to her or to any entity for which she is an officeholder in the following entities, for the Applicant to thereafter retain to the exclusion of the First Respondent:
(i)E Pty Ltd trading as F Practice; and
(ii)E Holdings Pty Ltd; (“the entities”) and
(b)Resign from her position as director of E Holdings Pty Ltd and/or any other roles in the entities;
(c)Transfer to the Applicant all accounts associated with the entities including but not limited to G Service, Facebook and other social media accounts, bank accounts, service accounts, trade accounts and the like; and
(d)The Applicant to thereafter indemnify and hold harmless the First Respondent as to all liabilities, debts, taxes or claims arising from or in connection with the entities.
10.To facilitate the implementation of Order 9 hereof:
(a)The Applicant do all such things as may be required to have his nominated accountant draw appropriate documentation (at the Applicant’s expense) necessary to give effect to the transfers and resignations provided for at Orders 9(a) and 9(b) hereof, with this documentation to be provided to the First Respondent within 15 days of the date of these Orders; and
(b)In the event that the First Respondent has failed to sign the documentation and return it to the Applicant (or the Applicant’s accountant or Applicant’s lawyer) within 30 days of the date of these Orders, then the Applicant be appointed pursuant to Section 106A of the Family Law Act 1975 (Cth) (“the Act”) to execute any documents required in the name of the First Respondent and do any other acts and things as may be necessary to give effect to Orders 9(a) and/or 9(b) hereof.
11.Within 30 days of compliance with Order 9 hereof, the Applicant and First Respondent do all such acts and things and sign all such documents as may be required:
(a)To wind up and/or vest (if not already done) the following at their shared cost:
(i)H Pty Ltd;
(ii)J Pty Ltd;
(iii)K Pty Ltd;
(iv)L Pty Ltd, and
(v)Any other remaining joint dormant entities.
(b)For the Applicant to be removed as Appointor, transfer to the First Respondent any beneficial interest, benefits or monies owed to the First Respondent and relinquish any interest in the M Family Trust, and the First Respondent to thereafter retain and to pay and indemnify the Applicant in relation to any debts and liabilities in respect to same.
(c)For the First Respondent to thereafter retain N Pty Ltd and to pay and indemnify the Applicant in respect to any debts and liabilities in relation to same.
12.The First Respondent be and is hereby restrained for a period of six months by way of injunction from:
(a)Attending within 100 metres of the F Practice located at X Street, Suburb Y; and
(b)Contacting the F Practice, or any employee of the F Practice.
13.The Applicant otherwise retain:
(a)Motor Vehicle 1registered in his name;
(b)Any bank accounts in his name or in the name of an entity in which he controls;
(c)His shares;
(d)His part-property payment of $100,000 received pursuant to the Orders of 7 February 2023;
(e)The $125,000 litigation funding received pursuant to the Orders of 27 May 2024; and
(f)Any furniture, chattels and household items in his possession.
14.The First Respondent otherwise retain:
(a)Her interest in the property located at O Street, City P in the United Kingdom (“the UK property”) subject to the mortgage with Q Financial Services;
(b)Motor Vehicle 2;
(c)Motor Vehicle 3;
(d)Any bank accounts in her name or in the name of an entity in which she controls;
(e)The $100,000 part-property payment she received pursuant to the Orders of 7 February 2023;
(f)The $125,000 litigation funding received pursuant to the Orders of 27 May 2024;
(g)The funds from the sale of her interest in the Town R, Country T property;
(h)Her interest in the City S, Country T property;
(i)Her Superannuation Fund 1 pension;
(j)Her Superannuation Fund 2 pension; and
(k)Any furniture, household items and personal items in her possession.
15.That each party bear their own (if any) capital gains tax liability associated with the sale of their interest in the U and V Practices.
16.The Court allocates, as required by s 90XT(4) of the Act, a base amount of $49,997 to Mr Manjani (“the non-member party”) out of the member interest of Ms Rama (“the member party”) in Superannuation Fund 3.
17.In accordance with s 90XT(1)(a) of the Act:
(a)the non-member party (or the non-member party’s financial manager, administrators, executors, beneficiaries, heirs or assigns) is entitled to be paid, using the base amount allocated in the immediately preceding order, the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
(b)the entitlement of the member party in the member party’s superannuation interest (or the entitlement of such other person who becomes entitled to receive a payment out of the member party’s superannuation interest) is correspondingly reduced by force of this Order.
18.The Trustee of the Fund do all such acts and things and sign all such documents as may be necessary to:
(a)calculate, in accordance with the requirements of the Family Law Act 1975 (Cth) and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the non-member spouse in the immediately preceding clause of this Orders;
(b)pay the entitlement whenever the trustee makes a splittable payment from the wife’s interest in the Fund.
19.This order has effect from the operative time and the operative time is the beginning of the day four days after this order is made.
20.After service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1994 (“the Regulations”) the member party shall do all such acts and things and sign all such documents as may be necessary, including but not limited to exercising the non-member party’s request in accordance with the Regulations for the transfer or rollover of the non-member party’s interest in the member party’s name in the Fund.
21.There be liberty to each party and the Trustee of the Fund to apply regarding the implementation of these Orders affecting the interests of the non-member party and the member party in the Fund.
22.That unless otherwise specified:
(a)The parties be solely entitled to the exclusion of the other to all other property in their possession (including choses-in-action);
(b)Insurance policies remain the sole property of the owner named therein;
(c)The parties be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled; and
(d)Any joint tenancy in any real or personal estate is hereby expressly severed.
23.The parties be at liberty to provide a copy of these Orders to their conveyancer, accountant, bank or other adviser as may be needed to assist in implementing these Orders.
24.In the event that the First Respondent refuses or neglects to execute any deed, instrument or document necessary to give effect to these Orders then:
(a)The Applicant be appointed pursuant to section 106A of the Act to execute any documents required in the name of the First Respondent and do any other acts and things as may be necessary to give effect to these Orders; and
(b)Order 24(a) of these Orders applies with respect to the execution of any PEXA documents.
25.The First Respondent pay the Applicant’s reserved costs from 27 May 2024, fixed on a party party basis in the sum of $5,500.
26.Each of the parties is at liberty to make an application for costs within 28 days of this date.
27.Otherwise, all extant applications are dismissed and the matter removed from the list.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the Manjani & Rama has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J
INTRODUCTION
The primary parties in this matter are the applicant de facto husband (“the husband”) and the first respondent de facto wife (“the wife”). Both seek an adjustment of their legal and equitable interests in property, the husband on an equal basis, and the wife based on what she claimed was a 60/40 per cent adjustment of the parties’ asset pool in her favour. Other issues which arise in the matter, beyond the percentage adjustment, are the composition and net value of their respective asset pools, which differ; and which party shall retain the F Practice business and the associated commercial real property from which it operates.
E Pty Ltd as trustee for E Trust (a fixed unit trust) operates under the trading name “F Practice”. The husband is the director of the company. The company is owned in equal shareholdings by W Pty Ltd ( a corporate trustee of the second respondent’s family trust) of which the second respondent is the sole director and shareholder, and N Pty Ltd (a corporate trustee of the M Family Trust of which the husband is the appointor and the husband and the wife are the primary beneficiaries) of which the wife is the sole director and shareholder. The F Practice business is co-owned equally between the husband and the wife as to one half, and the second respondent as to the other half.
E Holdings Pty Ltd is the sole registered proprietor of X Street, Suburb Y (“the Suburb Y commercial property”). The husband and the wife are the directors of the company. The wife owns (through the entity N Pty Ltd) 55 per cent of the shareholding and the second respondent (through his entity W Pty Ltd) 45 per cent of the ordinary shares issued in the company.
The second respondent joined the proceeding as an interested party in early 2023, in circumstances where the orders sought by the wife would, as he perceived it, adversely impact him in the operations of his business, and impact his property holding. He supported the making of final orders, in respect of that property of the husband and wife in which he has an interest, as sought by the husband. The second respondent’s evidence was that he cannot work with the wife in the operation of any business. He submitted that if he was compelled (because of this litigation) to remain in business with the wife, there would be the prospect of endless litigation between them, and the inevitable collapse of the business. His evidence was, by contrast, that he can work well with the husband and has always historically done so. The business operations of the F Practice provide to the second respondent 97 per cent of his income and distribution receipts. They provide to the husband 100 per cent of his income and distribution receipts.
The third respondent is the wife’s sister. She holds no legal interest in any real property in Australia. She is not a shareholder or person holding any entitlements within any entity or trust which is owned or operated by the other parties to the proceeding. The third respondent was joined to the proceeding (on her own application) by orders made the 27 May 2024, that is, very late in the litigation. The third respondent alleged that she advanced a loan to both the husband and the wife for the purposes of the purchase of the U Practice in early 2017. The third respondent claimed that the alleged loan monies derived from her personal savings as held in a joint offset account in the UK with Q Financial Services, the account being held jointly with the wife. The third respondent asserted an oral agreement between she, the husband and the wife, such that the alleged loan was to be repaid to her by the husband and the wife within four weeks. That did not occur. As a result, the third respondent claimed a further oral agreement was entered into between the husband, the wife, and her, such that the alleged loan would be repaid to her as soon as monies from the operating profits of the U Practice became available. When the alleged loan remained outstanding, in early 2018, the third respondent claimed a further oral agreement between her, the husband and the wife, that she would own 10 per cent of the Suburb Y commercial property as subsequently purchased by the husband and the wife, and the second respondent, through their respective entities. The third respondent also inconsistently claimed that this oral agreement, providing for her to have a 10 per cent interest in the real property, included the second respondent. The third respondent is not a registered proprietor on the Certificate of Title of the Suburb Y commercial property as to any part ownership of the property. The third respondent also claimed a 10 per cent interest in the F Practice as being a part of the various agreements as asserted by her. The third respondent also asserted that the alleged loan remains outstanding as it was not repaid out of the proceeds of sale of the U Practicein 2022, which she ‘expected’. She sought repayment of the loan; interest on the alleged loan together with other costs that she claimed had arisen for her because of the non-payment of the loan. The wife submitted that she “fully supports the orders sought by the [third] respondent”.[1]
[1] Wife’s written submissions filed 14 July 2024, p.3.
Orders sought
The husband sought orders, relevantly, that: the husband and the wife authorise and direct Australian Securities & Investments Commission (“ASIC”) to transfer to the husband for his sole ownership the whole of the funds held in unclaimed money, being $223,291.50, from the deregistered company B Pty Ltd; within seven days the husband and the wife do all things to cause the transfer to the husband of $150,002 from their National Australia Bank offset account and thereafter close the account; within 30 days the wife make a payment to the husband in the sum of $540,330; contemporaneously, with the payment, the husband transfer all his right, title and interest in the property located at C Street, Suburb D (“the Suburb D property”) to the wife at her cost and expense; the wife pay out the home loan account and discharge the associated National Australia Bank mortgage secured against the Suburb D property at her sole expense to release the husband from all liability; that all bank accounts in the joint names of the husband and the wife be closed; that the wife have sole use and occupation of the Suburb D property; and the wife pay and indemnify the husband in relation to the Suburb D mortgage and all other outgoings for the Suburb D property. In the event the wife failed to comply with orders as made by the Court, the husband sought that the parties forthwith sell the Suburb D property with the proceeds of sale to be applied to paying the selling agent’s fees and commissions, marketing and/or advertising expenses of the default sale, legal expenses of the sale, adjustment of usual outgoings, to discharge the mortgage affecting the Suburb D property, and with the balance going to the wife.
The wife sought final orders, as included in her closing written submissions, that she receive 60 per cent of the asset pool as composed by her. She sought to pay to the husband a sum of $666,370 within 90 days; contemporaneously, she sought that: the husband transfer to her his interest in the Suburb D property; that the wife discharge the NAB mortgage on the Suburb D property and indemnify the husband in respect of any debts associated with the property; and that, if the sum of $666,370 was not paid by her within 90 days, the Suburb D property be sold and the proceeds of sale be distributed to pay the costs of sale and discharge any encumbrances over the property; to pay to the husband any remaining amount owed to him, together with interest; and the balance thereof to be paid to the wife; for the wife to retain the F Practice and the Suburb Y commercial property by the husband transferring to the wife all his shares in any company in which he is a joint shareholder with the wife; the husband transferring to the wife all his legal and equitable interest in any real property jointly held with her, and the husband doing all things to resign as a director of all companies in which he and the wife are joint directors. The wife sought for the husband and the wife to do all things necessary to claim the monies held by ASIC in respect of B Pty Ltd and to thereafter distribute those funds to the wife; for the wife to retain the $150,000 in the parties NAB offset account; and for $33,325 to be allocated to the husband out of the wife’s interest in Superannuation Fund 3to effect a 60/40 per cent split of the husband and wife’s superannuation entitlements in the wife’s favour. The wife sought no division of her UK pension holdings. The wife otherwise sought for the parties to retain property and debt in their respective names and for the wife to retain any cash in bank accounts held in their joint names.
The second respondent sought orders, relevantly that, within 30 days the wife transfer to the husband all of the wife’s shares and interest in E Pty Ltd trading as F Practice and E Holdings Pty Ltd; resign from her position as director of E Holdings Pty Ltd and/or any other roles in the entities; transfer to the husband all accounts associated with the entities including but not limited to G Service, Facebook and other social media accounts, bank accounts, service accounts, trade accounts and the like; and for the husband to thereafter indemnify and hold harmless the wife as to all liabilities, debts, taxes or claims arising from or in connection with the entities; and for the wife to pay his costs on an indemnity basis of $32,517.90.
The third respondent sought orders, as set out in her closing written submissions, that: the alleged loan advanced by her in the sum of $286,160 (as of 11 July 2024) be repaid to her within 90 days; the difference in the amount paid in mortgage reinstalments by her totalling $74,514.46 (as of 11 July 2024) as claimed by her, be paid to her within 90 days; the lump sum of $610,674.46 be paid to her (having, in her earlier material, sought this payment in the sum of $1,333,232) with this figure claimed to be representative of her asserted 10 per cent share in the F Practice and in the Suburb Y commercial property, such sum to be paid to her within 90 days.
RELEVANT FACTUAL FINDINGS
In 1964, the husband was born. He was aged 60 years at the time of trial. He is in good health. The husband is a financial professional, with his current occupation being that of a senior office holder of E Pty Ltd.
In 1968, the wife was born. She was aged 55 years of age at the time of trial and is in good health. The wife is a health professional.
In 2003, the wife and the third respondent purchased the property at , O Street United Kingdom (“the O Street property”) as tenants in common in equal shares. The purchase price was GBP420,000 ($1,100,593.20).[2] The purchase was completed by application of savings of the wife and possibly the third respondent of GBP84,000, leaving a mortgage of approximately GBP336,000 ($880,474.56).[3]
[2] Historical currency conversion, being the average exchange rate of GBP to AUD in the year 2013.
[3] Historical currency conversion, being the average exchange rate of GBP to AUD in the year 2013.
In around 2008 or 2009, the husband and wife commenced cohabitation. The wife was working as a health professional (she had already worked for many years in the United Kingdom– since 1998, after she had completed her examinations) in a regional location and had secured a regional rental property. She was earning an income of approximately GBP60,000 to GBP65,000 per annum. The husband was unemployed. The parties resided in that location for approximately one and a half to two years. They then commenced to reside for a period of approximately two years, in City P, in the property of the wife and her sister (the O Street property). The husband made no contributions to the mortgage payments due in respect of that property at that time, with such payments as were due being wholly contributed to by the wife. The wife was continuing to work as a health professional and the husband had commenced to operate his own business, as encouraged by the wife, recruiting health professionals. His business traded as “Z Company”. The business took some six to eight months to produce any income to the husband, and in its first year of operation, the business provided an income of approximately $50,000 to $80,000, probably the smaller sum. Thereafter, and until 2019, the business provided income to the husband of approximately $120,000 to $150,000 gross per annum. Each of the husband and the wife contributed their income for the benefit of the parties including to the expenses of the husband and the wife, the savings of the husband and the wife, and the acquisition of property by the husband and the wife.
In or around 2012, the husband and the wife moved to Australia to reside. They commenced to reside with the husband’s family, and then in rental accommodation. The husband continued to work for Z Company, and the wife secured employment as a health professional at AA Practice.
In early 2014, the husband and the wife jointly purchased the Suburb D property for the sum of approximately $800,000 together with acquisition costs and stamp duty. This property was their home until their physical separation. The wife provided the sum of $126,341 toward the purchase; the husband provided the sum of $80,000. The balance was obtained by the parties by way of joint bank loan with the NAB in the sum of approximately $600,000. The parties set up a mortgage offset account with the NAB. The wife solely met the mortgage payments out of her income as was agreed between the parties. The husband applied his income to their other expenses and, where possible, to savings.
In 2014, the mother of the wife and the third respondent died in Country T. The third respondent, not living in Australia, went to Country T to register their mother’s death. The wife and the third respondent inherited their mother’s property in Town R, Country T.
In early 2017, the husband and the wife purchased a 50 per cent interest in the U Practice for approximately $450,000 plus associated costs. The second respondent held the other 50 per cent interest in the business. The husband and wife accessed the sum of GBP146,015 ($200,799.83, but agreed by the husband and wife as being $233,000) from the joint offset account held by the wife and the third respondent with Q Financial Services in the United Kingdom (this offset account related to the O Street property).[4] Those monies were transferred from Q Financial Services to a NAB account in the wife’s sole name. The husband and the wife intended to return the monies to the offset account as soon as they could. The husband reiterated that intention of the parties at trial, as did the wife in her evidence. The balance of the purchase price and associated costs including stamp duty, as to the husband and wife’s share, was paid by way of a deferred payment out of the profits of the U Practice.
[4] Historical currency conversion of 1 March 2017.
The U Practice was operated by the husband and the second respondent. It was an existing medical practice as operated by the second respondent with multiple health professionals operating out of the practice. The doctors paid a percentage of their billings to the business and the business provided the commercial premises and administrative support to the doctors. The wife did not work as a health professional in the U Practice.
In late 2017, the third respondent relocated from the UK and commenced to reside in Australia. She and her daughter took up rent-free occupation in the Suburb D property with the husband and the wife. The husband and wife commenced to pay for the living expenses of the third respondent and her daughter. The third respondent had been a health professional in the United Kingdom.
At a time in or around early 2018, the husband, the wife and the third respondent had a discussion or discussions at the Suburb D property concerning the possible purchase of a building on land in Suburb Y. The third respondent had been to a viewing of it with the husband. The second respondent was not present during any discussions had between the husband, the wife, and the third respondent. Despite the third respondent’s assertion that there was an oral agreement between the parties that, if purchased, she would acquire a 10 per cent interest in the real property, I find there was no actual oral or written agreement as asserted by the third respondent and the wife, as referred to hereafter in these reasons. There were discussions, some heated; an enquiry made of the second respondent by the husband and the wife as to his willingness to contemplate the third respondent having a 10 per cent interest in the real property before purchase; the response of the second respondent that he would agree to consider it; and the husband’s constant negative response to the requests of the wife and the third respondent regarding the third respondent having any interest in the property. From the outset, the husband made clear that he “strongly disagreed” with any suggestion of the third respondent participating in the purchase of the building.[5] Indeed, under any circumstances. He declined to reduce any discussion to writing to indicate any agreement because he did not agree to the part-ownership of the property by the third respondent.
[5] Transcript 3 July 2024, p.92 line 39.
In early 2018, the husband and the wife, and the second respondent, through their respective corporate entities, purchased the property at X Street Suburb Y in the State of Victoria (“the Suburb Y commercial property”) for $1,680,000. The property was registered in the name of E Holdings Pty Ltd. The differing shareholdings of the wife, and the second respondent, reflected the initial contributions to the acquisition costs by the husband and wife, and by the second respondent. The husband and the wife paid the $168,000 deposit on the purchase, with such funds deriving from the joint offset account of the husband and wife being the account offsetting the mortgage repayments over the Suburb D property. That account held the sum of $203,000 as a consequence of the husband and the wife refinancing their mortgage on the Suburb D property, increasing the mortgage from $600,000 to $800,000. The wife gave earlier and incorrect affidavit evidence that this deposit of $168,000 had been met by her earnings. The third respondent had no legal interest in the property.
In mid-2018, the Suburb Y commercial property was repaired and renovated by its owners to include building additional medical rooms and setting up the telephone and computer systems, signage and the general setting up of a medical practice, amongst other things. The husband and wife painted the premises and, on the husband’s evidence, and the wife’s earlier affidavit evidence, which she sought to resile from at trial (in her dismissal of the value of the husband’s contributions) the husband and the wife both worked very hard to enable the practice to commence operation. These works required funding by the owners of the property, and management time as spent by the husband and the second respondent. The funding was obtained from the cash flow and profit from the U Practice. The second respondent described the U Practice as the ‘Mothership’ which subsidised the F Practice for a number of years. There was a collaborative approach adopted by both clinics. The intent was to commence operating a newly established medical practice, operated by E Pty Ltd trading as “F Practice” from which contracted tenant doctors would operate. That intention became a reality, with the wife and second respondent applying their skills to build up the client base and make the medical practice successful.
The third respondent claimed that she made a significant contribution to the establishment of the F Practice, a business in which she also claims a 10 per cent interest pursuant to an oral agreement between the husband, the wife, the second respondent, and her. The third respondent did some minor painting, which was conceded as having been done but not appreciated by the husband; created a social media account, again not a task appreciated by the husband who deridingly stated that it had minimal posts; and further asserted that she had spent approximately $20,000, which was also said by her to be $25,000, on items to be placed in the practice. The third respondent provided no documentary or other probative evidence to support the expenditure which she claimed, and the Court can make no finding as to that which the third respondent asserted. The husband and the second respondent conceded the third respondent placed a few items in the practice, but they considered them of no significant value. The husband denied any quantifiable or significant input of the third respondent to the establishment of the F Practice. Indeed, when cross-examined by the third respondent about the contribution of the third respondent to the “startup and putting the clinic together contribution” he described her contribution as “zero”.[6] The evidence of the second respondent, which I accept, supported that of the husband. The second respondent submitted that there was no evidence that the third respondent made any meaningful contribution to the operation of the business, and I find that to be the case. Whilst the third respondent claimed to be employed by the practice, she was not so employed. What the third respondent did do, for a period of time, was both be present in the practice and run her own business from home, utilising the resources of the practice.
[6] Transcript 3 July 2024, p.104 lines 5-6.
Around mid-2018, the wife commenced working as a health professional at the F Practice. She retained 100 per cent of her billings. The wife was joined at the practice by a second health professional, as organised by the second respondent, after approximately two months of working on her own for three and then five days a week. The wife continued to supervise young health professionals at the U Practice ‘by distance’ for a fee of five per cent of the billings of those professionals. The wife trained students to gain a location exemption such that she was able to remain working in Melbourne (a migration requirement), as arranged for her by the second respondent and the wife retained all such fees for that training. The wife continued as a health professional at the F Practice until 2021, retaining 100 per cent of her billings.
In or around late 2018, the second respondent hosted the third respondent as a health professional.
In 2019, the husband and the second respondent established a new medical practice, the V Practice. The funding in respect of the establishment of this business derived from the cash flow and profit from the U Practice. The wife did not work in this medical practice.
In 2020, the husband and the wife acquired a 50 per cent interest in the BB and CC Practices from the second respondent’s then business partner for $1. These medical practices were subsequently sold. No profit was made from the sale of the practices.
In mid-2020, the wife and the third respondent sold the Town R, Country T property, as earlier inherited from their mother, for EUR250,000 ($410,000).
In July 2020, the husband and the wife separated under the one roof. The parties’ cohabitation extended over a period of approximately 12 years. They were never married, and there are no children of the relationship.
At separation or around that time, the wife removed $266,411, being monies in the husband and wife’s NAB offset account. The wife applied such funds to the reduction of the Suburb D mortgage from approximately $800,000 to $600,000. This had the effect of reducing the monthly mortgage and corresponding interest payable in respect of the property in which the wife resided.
In October 2020, the husband vacated the Suburb D property. The husband transferred the sum of $40,000 from the parties’ accounts to his own ANZ account. The wife, and the third respondent remained in occupation of the Suburb D property. The wife solely met the mortgage instalments on the property thereafter, and the husband took up rental accommodation where he continued to reside at trial. That rental accommodation incurred a cost to the husband of $37,440 per annum approximately. The third respondent continued to reside rent-free in the Suburb D property of the husband and the wife.
In late 2020, the wife and the third respondent were contacted by a real estate agent to inform them that they would receive their part of the proceeds of sale of their mother’s property as inherited by them in 2014/2015. All taxes, charges, and council fees for the property had been paid yearly by a relative of the wife and the third respondent. The wife and the third respondent claimed that they agreed that their share, being $410,000, would be left to the third respondent’s daughter. The sale proceeds, however, went into a bank account in the joint names of the wife and the third respondent, and it was conceded that each own 50 per cent of those funds. That is, the wife inherited $205,000.
Commencing in March 2021, and until May 2023, the wife transferred, in approximately 36 transactions, a total of $545,000 from her accounts in Australia to the Q Financial Services account that she held jointly with her sister. The wife had earlier, in 2017, transferred other funds in Australia to the UK, more than GBP146,000 ($251,112).[7] These funds were required to be returned to the husband and wife’s NAB offset account by earlier consent order of the Court made 7 February 2023 with which the wife complied. The wife’s evidence was that she expended $545,000 in approximately 17 months whilst living in City P from late 2021 on her medical treatment; the mortgage and other expenses of the Suburb D property and O Street property; her living expenses; the payment of the third respondent’s daughter’s private school fees and other associated costs; and that otherwise she placed GBP160,000 in the UK joint offset account of the third respondent and herself in which the third respondent claimed to have a 50 per cent interest. There were no funds remaining. The wife also went to Country T and removed approximately $205,000 (her 50 per cent share of the inheritance) from the joint account held with the third respondent and claimed to place same in an account in her niece’s name.
[7] Historical currency conversion, being the average exchange rate of GBP to AUD in the year 2017.
In August 2021, the wife removed the husband’s access to the parties’ joint offset account. The husband’s access online was not reinstated until February 2023, when the Court made orders to reinstate his access.
In late 2021, the wife relocated to the United Kingdom where she remained living for less than two years. During this time, the wife ceased to have any involvement in the F Practice. She did not work in the UK. The husband and the second respondent continued to operate the F Practice and provided distributions to the wife. The third respondent continued to reside rent-free in the Suburb D property.
In November 2021, the wife claimed ‘extraterritorial billings’ from Medicare.
The following day, the second respondent emailed the wife stating that ‘extraterritorial billings’ were not permitted under relevant health legislation. The wife confirmed the billings were created by her and suggested that they be backdated. The second respondent did not agree to that course.
Between December 2021 to April 2022, the wife submitted ‘extraterritorial billings’ to Medicare.
In or around early 2022, the U Practice and the V Practice were sold for a total of approximately $1,642,321.72. Settlement of the sale was completed in early 2022, with the husband and the second respondent attending to that which was necessary to effect the sale. On 28 February 2022, by agreement with the wife, the husband transferred the sum of $821,161 to the second respondent for his 50 per cent share in the sale proceeds. The remaining sale proceeds were otherwise dealt with by the husband and the wife; in part paid out to each by way of interim property distribution; and otherwise remained deposited in a NAB account in the name of B Pty Ltd ATF B Trust, account number ending …06 in the sum of $223,291.50. The funds remained so deposited (save for the wife’s withdrawal on 26 August 2022) when B Pty Ltd was wound up as a matter of urgency in the second half of the financial year ended 30 June 2023. In those circumstances, the NAB determined that the funds were required to be sent to ASIC Unclaimed Money Unit. The parties reached an impasse and could not act in concert to obtain the release of the funds to them. The Court is required to make a determination as to which of the husband and the wife receive those funds on their respective applications.
On 16 May 2022, the wife instructed her lawyers to advise the husband via his lawyers that she did not have, and had not had, an interest in the property of her mother in Country T and did not receive any of the proceeds of sale of the property. This was entirely misleading.
On 19 May 2022, the husband commenced proceedings in the Federal Circuit and Family Court of Australia (Division 2).
In August 2022, the mortgage balance secured by the O Street property was approximately $550,000. The wife provided no discovery as to this balance thereafter despite the husband’s requests for ongoing disclosure.
On 26 August 2022, the wife withdrew from the B Pty Ltd account the sum of $412,863 which she placed in the joint NAB offset account of the husband and wife in respect of the Suburb D mortgage.
Between August 2022 and August 2023, the wife withdrew approximately $19,438 from the husband and wife’s B Pty Ltd account for her legal fees. I note that the second respondent and the husband in mid-2023 also withdrew money from the F Practice account for legal costs being as to $3,018.35 by the husband for a valuation report and $4667 by the second respondent for legal fees.
In September 2022, the wife commenced to receive either income or distributions of $1,000 per week ($52,000 per annum) from the operation of the F Practice, having earlier been in receipt of distributions of $150,000 per annum.
On 11 October 2022, the balance in the husband and wife’s NAB offset account was $615,986. The wife accessed some of these funds such that she was ordered, by orders made 7 February 2023, to bring the balance of funds in the account up to $412,863 by no later than the following day. Thereafter, the NAB offset account of the husband and the wife was to be frozen. The wife did return funds to the account but with a shortfall of $12,861.
In early 2023, each of the husband and the wife received $100,000 by way of part-property settlement.
In early 2023, the wife returned from the United Kingdom to Australia.
By orders of the Court made in May 2024, the husband and the wife each received for litigation funding the sum of $125,000 from the funds in the NAB offset account belonging to the husband and the wife.
At trial, and for the first time, the wife supported the then very recent claim of the third respondent that the third respondent had an interest in the Suburb Y commercial property and in the F Practice.
MATERIAL RELIED UPON
The husband relied upon:
(1)Third Amended Application for Final Orders filed 10 June 2024;
(2)his affidavits filed 10 June 2024 and 24 June 2024;
(3)Financial Statement filed 10 June 2024;
(4)Outline of Case filed 26 June 2024;
(5)affidavit of Mr DD, single expert business valuer, filed 30 November 2022;
(6)affidavit of Mr EE, valuer of commercial property, filed 6 December 2022;
(7)affidavit of Mr FF, valuer of residential property, filed 22 May 2023;
(8)affidavit of Mr GG, property valuer, filed 17 June 2024;
(9)written submissions filed 12 July 2024 and 17 July 2024; and
(10)combined asset pool emailed to chambers on 8 July 2024.
The wife relied upon:
(1)her affidavit including exhibits filed 2 July 2024;
(2)written submissions filed 14 July 2024; and
(3)combined asset pool emailed to chambers on 8 July 2024.
The second respondent relied upon:
(1)Amended Response to Final Orders filed 17 June 2024;
(2)his affidavits filed 17 June 2024, both filed 26 June 2024 (excluding parts which related to the earlier adjournment application) and 27 December 2023 (paragraphs 7-11);
(3)Outline of Case filed 26 June 2024; and
(4)written submissions filed 12 July 2024 and 17 July 2024.
The third respondent relied upon:
(1)her affidavits filed 27 May 2024, 14 June 2024 and 25 June 2024; and
(2)written submissions filed 12 July 2024 and 17 July 2024.
Each of the parties introduced into evidence various documents as tendered during the proceeding.
EVIDENCE
Statements of fact in these reasons are findings of fact on the balance of probabilities unless the context indicates otherwise.[8]
[8] Evidence Act 1995 (Cth) s 140.
It is not necessary in these reasons for judgment to comment upon the entirety of the evidence including the evidence of each witness, nor to comment on every exhibit tendered. Nor have I done so. However, every piece of evidence relied upon by the parties has been read and carefully considered by me.
The husband
The husband gave responsive answers and made appropriate but also, at times, necessary concessions and admissions against his interests. He was more credible than the wife, and likewise the third respondent, and where the evidence of the husband and the wife and/or the third respondent differed, particularly in respect of the third respondent’s claims, I prefer the evidence of the husband save where indicated otherwise.
The wife
The wife was, on occasion, not a credible witness, significantly so when supporting the claims of the third respondent. Despite the wife being a legal owner of the Town R, Country T property from around 2015, she denied in her affidavit of evidence as filed 14 July 2022, to having such interest. Further, she instructed her lawyers to deny on her behalf and in correspondence to the husband’s solicitors that she ever had such an interest, past, present and/or future in the face of an assertion by the husband that she had such interest. The wife also failed in her duty of disclosure in respect of the joint UK joint offset account as described elsewhere in these reasons. Her evidence that there was in this account GBP289,000 around the time of trial was not previously disclosed by her, and was evidence given during the cross-examination of the wife. The wife’s complete financial position was generally obfuscated by her.
The second respondent
The second respondent was a reliable witness who was straightforward in the giving of his evidence. I accept his evidence.
The second respondent is an experienced practice manager. It was the position of the second respondent that the F Practice and associated real property should remain with the husband. The second respondent manages the business with the assistance and considerable contribution of the husband. They work compatibly together.
It was the evidence of the second respondent that he did not wish to remain in business with the wife due to her animosity towards him, and his belief that, if she remained in business with the husband and/or with him that there would be future protracted litigation. The evidence of the parties supported that belief.
The third respondent
The third respondent was not a credible witness in the context of her claims and pursued a case that was not meritorious, being not supported by the evidence.
LEGAL PRINCIPLES
Section 90SM of the Family Law Act1975 (Cth) (“the Act”) provides:
(3)The 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.
Orders under Pt VIIIAB of the Act altering the property interests of former de facto partners may only be made if the Court is first satisfied it is just and equitable to make such orders. It is necessary to begin that inquiry by identifying the existing legal and equitable property interests of the parties. It must not be assumed the parties’ rights to or interests in property are or should be different from those that then exist, or that a party has the right to have the parties’ property divided by reference to the statutory considerations (see Stanfordv Stanford (2012) 247 CLR 108 at [37]–[40] and [50] (“Stanford”)).
Although in Stanford the High Court was dealing with an application between spouses for property settlement pursuant to Pt VIII of the Act, the principles apply equally to applications between de facto partners pursuant to Pt VIIIAB of the Act.
It is permissible for the factors prescribed by s 90SM(4) (the counterpart to s 79(4)) to inform the inquiry under s 90SM(3) (the counterpart to s 79(2)) of the Act about the justice and equity of making property settlement orders (see Bevan & Bevan (2013) FLC 93-545 at [83]–[89], [163], [169] and [171]–[172]).
It has been determined that, in undertaking the task of considering the totality of the parties’ contributions in a holistic manner, it is inappropriate for a trial judge to adopt an ‘accounting’ or ‘scoring’ approach to each separate contribution. As explained by the Full Court in Blandford & Esmore [2022] FedCFamC1A 67 at [14], adopting such an approach is flawed because it “would not only require detailed actuarial calculations with respect to financial contributions (which would rarely be possible on the evidence generally available in property settlement cases), but it would still leave the significant problem of how to convert the qualitative factors in s 90SM(4)(b) and s 90SM(4)(c) of the [Act]”.
If and once determined it is just and equitable for the property interests of the parties to be altered, the process of evaluating the proper orders to make is dictated by the factors enumerated within s 90SM(4) of the Act. The court must necessarily identify and assess the parties’ contributions within the meaning of ss 90SM(4)(a)–(c) and then take account of the relevant matters referred to in ss 90SM(4)(d)–(g) and 90SF(3) of the Act.
I am satisfied that in all the circumstances of this case, it is just and equitable to make orders pursuant to s 90SM of the Act adjusting the parties’ property interests. Indeed, the parties ask the Court to do so, they no longer having any joint amenity of the assets of the relationship.[9]
[9] Bevan & Bevan (2013) FLC 93-545.
ASSETS, LIABILITIES, AND SUPERANNUATION OF THE PARTIES
Pursuant to orders made on 4 July 2024, requiring the husband and the wife to produce to the Court an agreed (as far as practicable) balance sheet, the husband and the wife provided to the Court for admission into evidence a combined asset pool following the conclusion of the trial which including agreed and disputed items. The disputed items were as follows:
Disputed Assets
Property
Owner
Husband’s value
Wife’s value
50 per cent interest in O Street, City P, United Kingdom
Wife
$638,712
$554,000
City S property, Country T
Wife
$22,000
-
Proceeds of the Town R, Country T property held in bank account
Wife
$205,000
-
Q Financial Services – UK offset account held with third respondent
Wife
$410,000
$272,591
Mortgage over the UK property
Wife
($275,000)
($550,338)
Alleged loan third respondent regarding O Street property offset account
Joint. I observe that the Wife has an interest in this property as to 50 per cent with the remaining 50 per cent interest as held by the third respondent
-
($285,000)
CGT with respect to U Practice and V Practice
Wife
-
($25,350)
Tax debt
Wife
-
($95,000)
Superannuation Fund 1
Wife
$183,228
-
Consideration of the disputed assets
O Street property
It is common ground that the O Street property in City P is held in equal shares by the first respondent and the third respondent.
Pursuant to a joint letter of instructions dated 22 May 2023, and interim orders made 7 February 2023, the parties engaged HH Ltdas a single expert to prepare a sworn valuation of the O Street property. That valuation evidence was before the Court. That evidence was not challenged by any party. Neither the husband nor wife sought to clarify with the single expert any part of his valuation report.
The single expert concluded that the market value of the property was GBP665,000. The single expert was aware of the property being designated ‘B2’ (which is not in dispute between the parties), which describes a high fire risk property with a need for remedial work and considered that status in reaching his conclusion as to the valuation ascribed by him. The single expert, in the context of the designation of the building, stated that his primary valuation was subject to two special assumptions; firstly, that there were no adverse issues in relation to the presence of combustible cladding or building materials and, secondly, that there was vacant possession.[10] If the first special assumption could not be made, namely the building was in fact encased with flammable cladding, then the market value of the property was discounted to GBP585,000. This was so because, in those circumstances, the market would be restricted to cash purchasers only (the banks not being prepared to advance the necessary funds). At pages six and seven of his report, the single expert valuer said, relevantly:
At the 2009 valuation date, there was no consideration of the issues which have come to light in the aftermath of the Grenfell disaster. In recent years, the situation regarding aspects of building construction and their fire safety have become greatly significant.
In this case I have been provided with the relevant EWS1 form for the building which stated a 'B2' designation. This denotes a high fire risk and the need for remedial works. Further to reviewing this, I asked for additional clarification on the current position and was directed to [Mr JJ] who is the building manager for the managing agent. His summary was that an FRAEW (Fire Risk Appraisal of an External Wall) had been commissioned and was awaited, and this would presumably highlight the remedial works needed. However, he also indicated that it was his understanding that the developer was to cover the costs of remedial work, meaning cost would not be passed onto the leaseholders themselves. This position is likely to be further bolstered by the introduction of the Building Safety Act 2022, however, at the time of writing, the situation is not definitive in terms of a clear pathway and timetable for remediation and absolute clarity on responsibility for costs. This is highly likely to have a material impact on the demand for and supply of flats on the market at the current time, and the attitude of mortgage lenders.
[10] Affidavit of Mr GG filed 17 June 2024, Annexure “MGG-2” p.10.
Having considered the above, the single expert maintained his primary valuation.
The wife did not adduce any evidence in relation to the cladding issue, or the second assumption of vacant possession of the City P property. It was incumbent on her to do so to support the valuation argued for by her.
I conclude, as submitted by counsel for the husband, there is no factual basis to depart from the single expert’s primary valuation as adopted by the husband.
A second issue in dispute in respect of this property is whether the wife is liable for the totality of the mortgage secured over the property. There is no dispute that the wife and the third respondent are co-borrowers and are jointly liable in respect of the O Street property mortgage. There is no evidence before the Court, nor legal basis, to apportion the whole of the liability for the mortgage to the wife, as the wife seeks to do on the basis that it is she who makes the mortgage repayments out of her income. Further, I observe that the wife submitted in closing that, as an initial contribution as made by her, she had a 50 per cent interest in the property, with her share of the mortgage being 50 per cent. The wife has attributed half of the value of the O Street property to her in the asset pool, with the difference in that value between the husband and the wife being consequent upon their differing interpretations of the single expert valuation. Her corresponding liability is as to 50 per cent of the relevant mortgage in the asset pool, not 100 per cent as asserted by the wife.
City S property, Country T
The wife holds a one-half interest in real property located in City S, Country T. She held such interest prior to the commencement of cohabitation. The wife deposed to the property having a value of GBP15,000. The husband agreed to that converting to a valuation of $22,000.
The husband has made no contribution to the property. It is in another country. The wife’s share is nominal in the context of this matter. The contribution to this asset is 100 per cent that of the wife, a contribution which has never altered. I take this into account.
Town R property, Country T
The evidence established that the proceeds of sale of the real property in Town R, Country T (of approximately $410,000) were transferred to a joint bank account in the name of both the wife and the third respondent in the period following the separation of the husband and the wife.
It is common ground that the wife’s interest in the account is $205,000.
The funds derived from the sale of the property owned by the wife and third respondent’s late mother represent an inheritance obtained by the wife and her sister in 2014. The husband made no contribution to the wife’s mother’s estate. The wife failed to disclose her receipt of these funds to the husband, and then claimed in the proceeding that her 50 per cent share of the funds so inherited had been gifted by her to her niece (the third respondent’s child). I observe that the funds were placed in the possession and control of the wife and the third respondent. The Court does not accept the evidence of the wife that she has gifted such funds to her niece, and find the funds are legally and beneficially held by the wife.
The husband sought for these funds to be included in the asset pool of the husband and the wife. It is appropriate that such property of the wife forms part of the asset pool. However, I am mindful that the wife’s receipt of monies from the sale of such asset occurred shortly after separation, and was an inheritance of the wife, and property to which the husband made no direct or indirect financial or other contribution. It is a contribution of the wife as to 100 per cent.
Q Financial Services – UK Joint Offset account held with the third respondent
It was the wife’s evidence, and that of the third respondent, that the third respondent advanced a loan of GBP150,000 ($250,000), now claimed by the third respondent to be $280,000 to the husband and the wife in 2017 from the UK joint offset account (as offset against the mortgage to the O Street property). This account has always been, and remains, a joint account held in the name of the wife and the third respondent.
The wife and third respondent also gave evidence that the loan was advanced to the husband and the wife, and to the second respondent. The evidence of the second respondent was that he was not the recipient of any loan advanced by the third respondent at any time. The second respondent’s evidence, that he was not a party to any loan agreement as alleged by the wife and her sister, was supported by the evidence of the husband, and by concession as made by the wife and the third respondent.
The UK offset account has had monies deposited to it by the wife in significant sum over time, by the third respondent in unknown sum if at all up to 2017, and by the husband between November 2017 and October 2020 in the sum of approximately $38,700.
The third respondent claimed that her sole savings comprised the monies advanced from the offset account to the wife’s NAB account in 2017, which were then applied by the husband and the wife toward the purchase of the U Practice. The third respondent, and the wife, claimed a loan agreement existed between the wife, the husband and the third respondent, for the return of the monies to the third respondent in a four-week time frame.
The 2017 withdrawal from the account was in fact not $250,000 but GBP143,000, being $233,000 as ultimately conceded by the wife in cross-examination. The asserted loan agreement could only be alleged as an oral agreement, there being, as submitted by counsel for the husband, no written loan agreement, memoranda, notes, correspondence or documents of any description acknowledging the alleged loan or the terms of the alleged agreement. On either of the wife’s or the third respondent’s evidence, the alleged loan agreement provided for no interest component or claim in the third respondent’s favour in respect of the U Practice, or any subsequent medical practice.
The husband agreed that, in 2017, monies were derived by him and the wife from the offset account with Q Financial Services as held by the wife and her sister. He agreed that the sum of $233,000 was transferred from the offset account, to a NAB account in the sole name of the wife. Thereafter, he agreed it was applied by the husband and the wife in the purchase of the U Practice. The husband, however, challenged whether any of the monies belonged to the third respondent. He otherwise agreed that he and the wife intended to pay those funds back into the offset account as quickly as possible, and perhaps initially envisaged in a four-week period.
Neither the wife nor the third respondent adduced any evidence as to the origin of the contributions made to the UK joint offset account, either before or after the alleged loan transfer, or the balance at separation, notwithstanding Court orders requiring the wife to do so; the obligations created by the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”); and specific requests made by the husband, including a call for documents during the opening of the husband’s case. It is improbable that the third respondent contributed any funds to the UK joint offset account after March 2017, having regard to her financial dependence, and that of her daughter, on the husband and the wife since their arrival in Australia in 2017.
I find that the third respondent’s failure, and that of the wife, to put before the Court corroborating documentary evidence to support that which the third respondent asserted about the origins of the funds sitting in the UK joint offset account, namely that they were her sole savings, precludes the Court from making a positive finding as to that which she and the wife assert. Further, I find in the absence of such relevant and probative evidence, combined with a lack of probative evidence on which the Court could rely as to how the third respondent made such a financial contribution to the offset account, that it is probable that the origin of the funds were the wife’s contributions, in whole or in part.
Following the separation of the husband and the wife, monies were transferred by the wife into the UK offset account of her and the third respondent. Those monies were funds significantly accumulated by the wife, and by the wife and the husband, during their cohabitation, and were funds that had been placed in their respective accounts. The wife and the third respondent were compelled to admit during the trial, there remained approximately GBP289,000, or $547,747,[11] standing to the credit of the wife and the third respondent in the UK joint offset account. These were funds belonging to the husband and the wife.
[11] Historical currency conversion of 1 July 2024.
The husband and wife could not agree on the value of the UK offset account to be included in the asset pool. The wife claimed that the value of $272,591 should be attributed to it, being 50 per cent of the approximate $545,000 total standing to the credit of the wife and the third respondent. The wife’s claimed value assumes that the funds held in the UK offset account were accrued through equal contribution of the wife and the third respondent. As outlined above, they were not. The husband claimed that a value of $410,000 should be attributed to the UK offset account, being approximately 75 per cent of the total, and being a compromised position given that it is impossible to determine (due in large part to a lack of disclosure from the wife and the third respondent) what exactly the entitlements of the wife and the third respondent are with regard to the funds in the UK offset account. For these reasons, I prefer the husband’s evidence and have adopted his figure as to the wife’s share of the funds remaining in the UK offset account, being $410,000.
Alleged varied loan
The third respondent’s evidence, as supported by the wife’s evidence, was further that, when the alleged loan of GBP150,000 was not repaid within the agreed four weeks by the husband and the wife, they subsequently, in the following year, offered her 10 per cent of their interest in the Suburb Y commercial property. The third respondent claimed that she had been reassured by both the husband and the wife, and as confirmed by the second respondent, that her 10 per cent share in the Suburb Y commercial property was secured. This agreement was said to have been made prior to the purchase of the property.
In the wife’s earlier sworn evidence of July 2022, the wife made no mention of any agreement as to her sister having a 10 per cent interest in the Suburb Y commercial property. She did, however, give contradictory evidence by deposing that “the payments that I am making to [Ms Wilms] are in essence, in lieu of paying the interest on the loan” being the alleged loan as provided in 2017. The payments to which the wife referred were the payments made on behalf of she and the husband for the support of the third respondent and her daughter including the occupation of their home with them. Additional to the payment of those expenses was the payment by the husband and wife, and subsequently the wife solely, for the child for school fees and associated expenses in the sum of approximately $46,000 per annum. The wife’s evidence, that her payments represented an interest payment on the loan, paid over many years, was nonsense.
The third respondent claimed further that she had worked in the F Practice with the wife, and that she had invested over $25,000 in setting up the clinic through purchasing items. She claimed she had acquired a 10 per cent interest in the business by virtue of her expenditure of these funds, and her provision of assistance in setting up the practice through, in particular, her advertising skills, and by her work as a health professional in the practice. She claimed further that in acquiring the 10 per cent interest in the Suburb Y commercial property, without more, she was given a 10 per cent interest in the F Practice. The third respondent was, in fact, never employed by the F Practice. She was not part of the management of the practice; her assistance in small tasks performed was not significant nor necessarily sought; and that whilst she did, as conceded by the second respondent, provide some items to the practice at its formation, these various items of property had a value of no real significance and certainly not that which the third respondent claimed. The third respondent provided no probative evidence to establish otherwise.
The second respondent otherwise disputed that the third respondent had made any meaningful contribution to the F Practice or made contributions to the Suburb Y commercial property such as paying rates, expenses or participating in decision making.
The second respondent’s evidence as to the purchase of the Suburb Y commercial property was that, before the purchase, he was told, I infer, by the wife and/or the third respondent that the deposit monies of $168,000 were to be provided by the third respondent and that, accordingly, the third respondent was proposed to have a 10 per cent interest in the ownership of the property. His further evidence was that he subsequently became aware that he was misled in respect of the third respondent providing the deposit monies, with such deposit monies being actually provided by the husband and wife.
The evidence as to this matter is otherwise set out in the factual findings, and the husband and second respondent’s evidence is supported by the ownership of the real property and the business.
CGT with respect to U Practice and V Practice and tax debt
Counsel for the husband submitted that the wife did not adduce any evidence for the Court to find that there is, or is likely to be, a capital gains taxation liability arising from the sale of the U and V Practices, sold in two months in early 2022 respectively. Further, that there was no evidence before the Court on which the Court could find that there was a ‘tax debt’ owed by the wife that required to be considered. I agree with those submissions. The wife provided no probative evidence to support that which she sought to be included in the asset pool of the husband and the wife in the form of capital gains tax liability.
Superannuation Fund 1
Whilst the wife, in the early part of the proceeding, denied that she had any pensions based in the UK, there was at trial no dispute that the wife holds an entitlement with Superannuation Fund 1 in the UK. In February,[12] in June 2023,[13] and again in September 2023,[14] the wife was ordered to do that which was required to obtain the cash equivalent transfer value of her Superannuation Fund 1 by way of disclosure. The wife was also required to provide discovery of her Superannuation Fund 2 in the UK. The wife, having initially failed to comply with the earlier orders, significantly delayed her compliance with the September 2023 orders. At trial, the material before the Court was as contained in the husband’s evidence. That material established that the wife’s Superannuation Fund 1 had a Cash Equivalent Transfer Value (“CETV”) for divorce or dissolution of a civil partnership in 2015 of GBP46,556 ($91,614.75),[15] which, if had added to it annual CPI increases as calculated by the Bank of England, would have been $124,860 as calculated by the husband when he was unable to get updated figures from the wife or the superannuation organisation. That evidence was updated in the husband’s affidavit in reply to include the superannuation organisation advice of 16 June 2024, which calculated the amount of the CETV to be GBP95,571.31. This equated to $183,228 as at 17 June 2024. This was the best evidence available to the Court in circumstances where the wife put no updated figure before the Court, when she had a clear capacity to do so. The wife’s Superannuation Fund 2 pension is unable to be quantified as it is conditional on the wife satisfying certain conditions, not currently satisfied, to have any value.
[12] Orders of 7 February 2023, Order 14(e).
[13] Orders of 23 June 2023, Order 11.
[14] Orders of 7 September 2023, Order 5(a).
[15] Historical currency conversion, being the average exchange rate of GBP to AUD in the year 2015.
The wife’s entitlement to her Superannuation Fund 1 arose from the wife’s employment in the UK as a health professional. It commenced to accrue upon the wife obtaining full registration to practice as a health professional and commencing to practice in the United Kingdom around early 1998, some 10 years before the cohabitation of the husband and the wife. The husband and wife left the United Kingdom in 2012. This meant that some 10 years of the 14 years the wife accrued this pension it was a contribution made solely by the wife.
Alleged material non-disclosure of relevant information and documents by the wife
The husband contended that the wife had failed to make full and frank disclosure of her true financial circumstances and that she had obscured her dealings and transactions with property post-separation. That is an accurate observation, as glaringly obvious in the wife’s denial of any interest in the Town R, Country T property.
The husband contended that the wife also failed to provide disclosure of relevant bank statements. That, too, is an accurate observation of which a glaring example was the ultimate disclosure of the GBP289,000 credit in the UK joint offset account on the third day of cross-examination at the final hearing.
Agreed and Court-determined asset pool
The asset pool, as I determine it, and as agreed, is as follows:
Property
Owner
Value
C Street, Suburb D
Husband and wife
$1,450,000
50 per cent interest in O StreetO Street, City P, United Kingdom
Wife
$638,712
City S property, Country T
Wife
$22,000
50 per cent of the proceeds of the sale of the Town R, Country T property held in bank account
Wife
$205,000
Q Financial Services – UK offset account held with third respondent
Wife
$410,000
Funds currently held by ASIC
Husband and wife
$223,291.50
Funds in frozen NAB offset account …00
Husband and wife
$150,002
Motor Vehicle 1
Husband
$20,000
Motor Vehicle 3
Wife
$2,500
Motor Vehicle 2
Wife
$55,000
E Pty Ltd trading as F Practice
Husband and wife
$239,000
E Holdings Pty Ltd
Husband and wife
$1,292,500
Part property distributions
Husband
$225,000
Bank KK account
Wife
$4,008
Part property distributions
Wife
$225,000
Superannuation Fund 1
Wife
$183,228
Total assets
$5,345,241
Liabilities
Mortgage X Street, Suburb Y
Joint
$808,500
Mortgage over the UK property
Wife
$275,000
NAB mortgage for Suburb D property
Joint
$598,487
Total liabilities
$1,681,987
Net total
$3,663,254.50
Superannuation
Superannuation Fund 3
Husband
$32,457
Superannuation Fund 3
Wife
$132,450
Total superannuation
$164,907
CONTRIBUTIONS
Commencement of cohabitation
The husband at the commencement of the relationship had assets totalling approximately GBP65,000, comprising GBP45,000 cash and a motor vehicle then recently purchased for GBP20,000, together with furniture. The husband was not challenged in relation to his initial contributions. The wife held a 50 per cent interest in the O Street property with personal equity of approximately half the monies applied; a motor vehicle; the City S, Country T property with a nominal value; and her entitlement in the Superannuation Fund 1 account valued at GBP46,117 ($83,738.16).[16] The wife was employed as a qualified health professional and the husband was unemployed, yet to establish his own fledgling recruitment business, Z Company.
[16] Historical currency conversion of 1 October 2009.
During cohabitation
For the first approximately two years of the relationship, the husband and the wife resided in rented accommodation in the United Kingdom. The wife met the rental payments. For the following two years, the husband and wife lived in the O Street property of the wife and her sister, with the wife meeting 50 per cent of the mortgage payments, her interest in the property being 50 per cent. The husband’s contributions to the maintenance of the property were minimal. His income was considerably less than that of the wife and remained so.
The parties moved from the UK to Australia in 2012, and until 2014 they lived mostly in rental accommodation as paid by the wife from her income as a health professional. She remained working as a health professional for the duration of the relationship, both on a full and part-time basis. She earnt an income of at least $150,000 per annum, and in all probability, much more. The wife’s income was dependent upon her working hours. During the period from 2012 until 2019, the husband operated his business, Z Company, and derived earnings of approximately $120,000 per year until changes in government policy caused the husband to close the business in 2019.
In 2014, the husband and the wife purchased the Suburb D property. The parties met the purchase price with savings accumulated by each of them from their respective employment, in separate bank accounts, and with funds borrowed and secured by a mortgage over the property.
Commencing in 2017, the husband, the wife and the second respondent, purchased multiple real properties and/or businesses including the Suburb Y commercial property. The husband and/or the second respondent operated the businesses whilst the wife worked as a health professional. Each of the husband, wife and second respondent were involved with the acquisition and growth of their enterprises, and in their respective roles. The enterprises obtained secured debt where necessary.
In 2019, the husband began contributing to an account jointly held with the wife from which mortgage payments for both the Suburb D and O Street properties were made. Prior to this time, the husband had made no payments towards the mortgages. His income was applied to the parties’ living expenses and savings.
The husband and wife acquired their interest in the various businesses as operated by them and the second respondent, and their interest in the Suburb Y commercial property, from joint secured debt and/or their personal savings and/or the cash flow and profits of the U Practice as acquired during their cohabitation. The husband’s skillset was running a medical recruitment business and, in combination with the second respondent, developing and running medical practices. The wife’s skillset was as a skilled and highly competent health professional who built up her patient lists. The second respondent conceded that the first respondent “played an important role in the creation and initial running of the [Suburb Y] practice”.[17] However, “the running of the business is and always was a domain of the applicant and [the second respondent]”.[18]
[17] Second Respondent’s written submissions filed 17 July 2024, p.1.
[18] Second Respondent’s written submissions filed 17 July 2024, p.1.
Otherwise, the parties’ contributions were as set out throughout these reasons. Whilst the wife earnt considerably more than the husband, there were a myriad of contributions made equally by each of the husband and the wife together with those real property contributions as made solely by the wife.
Post-separation
Counsel for the wife submitted that the husband made little to no post-separation contribution to the asset pool. The wife claimed her post-separation contributions thus exceeded those of the husband insofar as the wife continued to pay her mortgage share on the O Street property from the date of separation until trial, and the wife made all mortgage payments in respect of the Suburb D property. The wife has, however, had occupation of the Suburb D property since separation, as has her sister (and niece) without payment of rent. Indeed, the property was occupied by the third respondent rent-free, from late 2021 until early 2023, in the wife’s absence. The wife was in the UK at that time and living in the O Street property. The wife has also had the use of the City P property, and an opportunity to rent that out to meet any expenses during the times she has not been in occupation.
Between March 2021 and May 2023, the wife transferred a total of GBP284,054.90 (or approximately $545,650) from Australian bank accounts in her name and from the NAB offset account in the husband and wife’s joint names into, ultimately, the UK offset account in her name and that of her sister.
The husband and the second respondent post separation have continued to operate the F Practice.
Conclusion as to contributions
The contributions made at the commencement of the relationship, during the relationship and post-separation are approximately equal save for the first respondent’s interest in the Country T properties and her Superannuation Fund 1 pension, both of which represent greater contributions by the wife. The parties’ contribution to their respective Superannuation Fund 3 superannuation funds I consider to have been equal, and I propose an equalisation of those benefits, apart from the adjustment to be made to the parties’ asset pool.
I conclude that the wife’s contributions exceed that of the husband’s and, in that regard, I take into account also that the alleged loan, which I find not to have been a loan as advanced by the third respondent, was nevertheless an amount in the sum of $233,000 that was a contribution either wholly or as to no less than 50 per cent of the wife. An adjustment is required and that adjustment should be 5 per cent.
RELEVANT S 90SF(3) CONSIDERATIONS
The husband is 61 years of age. The wife is 56 years of age. Both can earn a good income. Their respective incomes will support their reasonable living expenses and provide for a lifestyle to which they are both accustomed.
Both sought to retain the F Practice and the Suburb Y commercial property as part of an overall property adjustment. The wife sought additionally retention of the real property as held by her, and as held by the husband and wife jointly. The husband was content to transfer to the wife his interest in the Suburb D property for a consequent payment to him with that approach allowing for the ongoing occupation of the home by the wife, the third respondent and the third respondent’s child. The husband has resided in rental accommodation since the separation of the husband and the wife.
If the husband is successful in seeking retention of the F Practice and associated commercial property, he will be able to continue as a company director of E Pty Ltd and receive an income and/or distributions considerably in excess of $52,000. The practice receives 30 per cent of gross billings from the contracted practice-associated GP tenants which can be in number multiple doctors. Rental income from a related service together with third party rental receipts are also part of the income of the practice. As said by each of the husband and/or the wife, a health professional can earn $100,000 to $150,000 per annum and some, up to some $500,000 per annum.
The wife is a very experienced and skilled health professional. Her income is commensurate with her working hours. In the four months between March and June 2024, her income was approximately $20,000 per month. She has a capacity to earn a probable $200,000 to $300,000 per annum. Her suggestion that her health is an impediment to her significant earning capacity is rebutted to the extent that she can presently earn an income, superior to that of the husband, in the circumstances of her current health. I observe that there was no expert evidence supporting the wife’s assertion as to her state of health and its adverse impact upon her earning capacity. Further, in her closing submissions, the wife submitted that she was in good health and conceded her income and earning capacity exceeded that of the husband.
Neither party has an obligation to support another person. The wife elects to make the generous provision that she does for her sister and niece.
I conclude that no adjustment should be made in either party’s favour on account of these matters.
CONCLUSION
It is clear that the husband and the second respondent continued to operate the F Practice following the wife’s departure to the UK in 2021. The wife’s return to Australia has seen no change to their ongoing operation of the business. The husband and the second respondent want to continue their exclusive operation of the business. The husband and the second respondent’s seeking orders for retention of the F Practice together with the Suburb Y commercial property are appropriate orders in all the circumstances and afford justice and equity to the husband and wife, particularly in the context of the totality and nature of their assets. Such an outcome is also sought by the second respondent to ensure that continuation of the practice without further resort to litigation. The second respondent has a legitimate interest in the F Practice and the Suburb Y commercial property as an owner, and his application should also be acceded to.
The wife submitted that she and the husband were able to engage in productive employment until they reach retirement age. The wife conceded that she had a greater earning capacity than the husband. The retention by the husband of the F Practice and Suburb Y commercial property secures his earning capacity into the future.
The wife sought orders such that she receive 60 per cent of the asset pool with the Court adopting a global approach to the division of the assets of the husband and wife, leaving out of the assets of the wife’s Country T property interest funds and her Superannuation Fund 1. I have included those assets as I must, but acknowledge the wife’s sole contribution to these assets and her significant contribution to her Superannuation Fund 1 pension
Given the length of the relationship, the quantum of the asset pool, and other matters as canvassed in these reasons, I consider a just and equitable outcome to be an adjustment of the net assets of the husband and the wife in favour of the wife being a 55/45 per cent adjustment. In dollar terms, the husband shall receive $1,648,464.52 and the wife $2,014,789.98, a differential of $366,325.46. In my view, orders to that effect are appropriate and, in all the circumstances, just and equitable.
The husband and the second respondent sought a raft of restraint orders against the wife. These were directed to restraining her from attendance upon the F Practice; from communicating with the practice and/or its employees; from contacting any doctors consulting at the F Practice, such doctors I note being tenants of the business premises and independent of the business; from contracting any supplier, service provider, or trader who deals with the F Practice; and otherwise personal restraints restraining the wife from communicating with the husband save for written communication and/or being in his presence (within five metres).
There is no evidence of recent behaviours or difficulties that would warrant the need for these orders, certainly the personal orders as sought by the husband. The restraint in respect of the doctors who consult at the business premises and those persons who supply services or goods to the F Practice is overreach, and may well be calling upon the Court to exercise an accrued jurisdiction without identification and power (whilst acknowledging the Court does have an accrued jurisdictional power).
I accept there is some past evidentiary basis for the making of the earlier restraint orders as against the wife. I consider until the orders the Court shall make are fully implemented, there may be some difficulty between the husband and wife and some basis for limited restraining orders. Accordingly, the Court is prepared to make such orders as it does.
The third respondent’s claims are not supported by the evidence and not meritorious. The wife’s removal of funds of the husband and wife’s post separation, in particular the $545,000, together with the extent of support provided to the third respondent and her daughter by the husband and the wife, or the wife solely, establish the validity of the husband’s evidence that the funds originally deriving from the UK offset account have “been fully returned in abundance”.[19]
[19] Transcript 3 July 2024, p.102 lines 14-15.
COSTS
The husband sought the wife pay his costs as reserved from 27 May 2024 fixed on an indemnity basis in the sum of $15,765. I propose to make an order for costs on a party and party basis in the sum of $5,500. The circumstances, in the exercise of my discretion, do not warrant the unusual order, in this jurisdiction, of an indemnity costs order.
The husband and second respondent further sought that the wife pay the costs of and incidental to their costs in this proceeding on an indemnity basis. There is no obvious basis for a costs order in favour of either the husband, or the wife, or the second respondent on the evidence before me. The usual statutory regime of each party to pay their own costs should be followed unless there is a statutory reason for a costs order application to be made. The parties each have liberty to make such application, if appropriate, within the next 28 days.
I certify that the preceding one hundred and thirty-four (134) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett. Associate:
Dated: 21 March 2025
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