Marsden and Baker
[2013] FamCA 320
FAMILY COURT OF AUSTRALIA
| MARSDEN & BAKER | [2013] FamCA 320 |
| FAMILY LAW – PROPERTY – complex company and trust structures – issues as to the extent of husband’s property and the extent of his liabilities in the context of various business and investment failures – failure by the husband to make full and frank disclosure – short relationship and serious reduction in the husband’s wealth. |
| FAMILY LAW – SPOUSAL MAINTENANCE – order made February 2012 discharged – wife’s applications for maintenance dismissed – wife in new relationship and having received significant spousal support since 2009. |
| Family Law Act 1975 (Cth) ss 75 (2) and 79 |
| Black & Kellner [1992] FLC92-287 |
| APPLICANT: | Ms Marsden |
| RESPONDENT: | Mr Baker |
| FILE NUMBER: | MLC | 2909 | of | 2011 |
| DATE DELIVERED: | 7 May 2013 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 12, 13 & 14 November 2012 & 7 December 2012 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Smallwood |
| SOLICITOR FOR THE APPLICANT: | Taussig Cherrie Fildes |
| COUNSEL FOR THE RESPONDENT: | Mr Brown SC |
| SOLICITOR FOR THE RESPONDENT: | Hayden Legro Lawyers |
Orders
The order made 16 February 2012 that Mr Baker (‘the husband’) pay spousal maintenance to Ms Marsden (‘the wife’) be discharged as and from the date to which it is stands paid or the date of this Order, whichever is the earlier date.
The application by the wife for periodic and/or lump sum spousal maintenance is dismissed.
By way of property order, the husband pays to the wife the sum of $330,000 within sixty (60) days from the date of these Orders.
The husband shall indemnify the wife in respect of all personal tax liabilities to the Australian Taxation Office for any taxation liability of the parties accrued during the relationship between the parties.
The wife take the whole of the legal and equitable interest (as against the husband) in Porsche … motor vehicle registered number … .
Unless otherwise specified in these Orders:-
(a)each party be solely entitled to the exclusion of the other party to property in the possession of such party as at this date;
(b)any funds standing to the credit of the parties in any joint bank account is to become the property of the wife;
(c)each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other;
(d)any insurance policies remain the sole property of the owner named therein; and
(e)each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
Any and all application/s for costs to be dealt with according to the Family Law Rules 2004; including the lodgement of any application in a case together with an affidavit in support within the time specified in the Rules.
The wife’s application in a case filed 15 January 2013 (for enforcement of a spousal maintenance order) is dismissed as and from twenty eight (28) days from the date of this Order.
All other extant applications for orders be otherwise dismissed and removed from the list of cases awaiting finalisation.
Following the expiration of the appeal period, all subpoenaed documents shall be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.
Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage senior counsel and counsel to attend.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Marsden and Baker has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT HOBART |
FILE NUMBER: MLC 2909 of 2011
| Ms Marsden |
Applicant
And
| Mr Baker |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
These are property and spousal maintenance proceedings between Ms Marsden (‘the wife’) and Mr Baker (‘the husband’). The parties were in a relationship for about 3½ years from 2006 to 2009. The husband was and perhaps still is a wealthy person, although that wealth has been seriously diminished in recent years, particularly following the Global Financial Crisis.
There are significant issues between the parties as to:-
a)the quality and reliability of the evidence of the husband, the wife, and their respective witnesses;
b)the financial circumstances of the husband;
c)the respective contributions of the parties;
d)whether the husband failed to make full and frank disclosure of his property to the Court;
e)whether the wife is able to find paid employment;
f)the nature of her relationship with her present partner; and
g)whether the wife should receive periodic and/or lump sum spousal maintenance.
The wife asserts that the husband has property to the extent of at least 12 million dollars and that he is hiding that property to defeat her in these proceedings. The husband asserts he is impecunious and has nothing of significance remaining from the property in which he had legal or equitable interest or around 2008/2009/2010, which seems to have been of the order of 17 million dollars.
In her opening submissions counsel for the wife said her client sought a capital payment of two million dollars either as property adjustment and/or spousal maintenance; and she said that on payment of that sum any order for periodic spousal maintenance should be discharged. She further submitted that if the amount payable to the wife was less than that sum then there ought to be periodic payments. In addition, the wife sought to retain her Porsche motor vehicle, the proceeds from the sale of an engagement ring, her chattels and her modest superannuation entitlement.
In the husband’s case outline the husband sought orders that the wife take an interest in some of the husband’s trusts and corporations, this on the basis that the wife was entitled to twenty percent. His case was that these were valueless. The husband agreed that the wife retain her car, proceeds of the engagement ring and her superannuation. He sought discharge of the maintenance orders made in 2012 to the date they stood paid.
In addition the husband sought orders that he indemnify the wife in respect of all personal tax liabilities to the Australian Taxation Office for any taxation liability of the husband accrued during the relationship. This order was not the subject of submission and I have treated it as being uncontentious.
Finally the husband sought an order that each party retain his/her personal property and superannuation. Neither party sought a splitting order in respect of superannuation.
To determine the scope of the property dispute each of the parties reflected on a percentage, namely twenty percent. This was misleading in a number of ways.
The wife asserted she was entitled to twenty percent of the pool, which on her figures would have amounted to about $2.4 million dollars, yet she sought two million dollars. I am not confident that this perceived ‘discount’ was driven by any sense of chivalry or fondness on the wife’s part towards the husband. She was fixed on the two million dollars and submitted that if on a property adjustment she received less that that sum, any shortfall should be made up by way of lump sum spouse maintenance.
The husband submitted in his case outline that the wife have transferred to her, a twenty percent interest in each of; the husband’s or his alter ego’s equity in;
·the loan repayments of BB Group Pty Ltd;
·his equity in CC Pty Ltd and DD Pty Ltd;
·his equity in EE Pty Ltd;
·the proceeds of legal actions against DD Pty Ltd and/or FF Pty Ltd by GG Group (net of legal expenses);
·his equity in HH Ltd;
·the dividend received from the liquidation of JJ Ltd in KK Company;
·his interest in LL Ltd, and
·his interest in MM Ltd either directly or through the husband’s interest in NN Pty Ltd.
The loan repayments of BB Group Pty Ltd was valued by the husband at between $400,000 and $750,000 and on that basis by Ms B at $400,000 to about $550,000; CC Pty Ltd and DD Pty Ltd had a value of about $336,000; EE Pty Ltd has a nil value; the proceeds of legal actions against DD Pty Ltd and/or FF Pty Ltd by GG Group (net of legal expenses) was such that Ms B attributed no value to it. She valued HH Ltd at $80,000, KK Company at nil, LL Ltd has a value of $1850 and MM Ltd (in whichever form or guise) has no value. In submissions the husband ascribed no particular value to these as a whole and in his case outline filed 9 November 2012 asserted the net property pool at negative $3,007,246. This would have been affected by the husband’s claim of significant tax liabilities which have or may arise. The transfers may in all of the circumstances been illusory.
The scope of the dispute is between in essence nothing or little of real substance in the context of the husband’s company and trust structures, with their Byzantine politic like complications, and $2,000,000 on the wife’s case.
The wife seeks an indemnity costs order and I have neither considered nor determined that question. Costs are matters for argument, if appropriate, after the delivery of these reasons and the making of substantive orders. It is up to the parties to make an application for costs in accordance with the Family Law Rules 2004 (Cth).
In these reasons any statement of fact is to be regarded as a finding of fact unless the contrary is clear from the context of the statement.
Background
At the date of hearing the husband was aged 53 and described his occupation as an entrepreneur. The wife was aged 44 and has been involved in parenting for many years.
The wife has two children of a previous marriage, C aged 17 and D aged 14. The wife commenced a relationship with Mr E in late 2009 and she and Mr E have been living together since at least July 2011.
The husband had been previously married and he has two adult children of that marriage, Mr A aged 27 and Mr F aged 24.
The parties commenced cohabitation in May 2006 and were married in February 2009. The parties separated in mid to late 2009. Their relationship was for a period of about three and one half years. There are no children of their relationship.
In August 2009 the wife moved out of the parties rented apartment and moved to rented premises at Suburb G. The husband executed a twelve month lease on behalf of the wife. At that time, the husband was providing financial support for the wife in the vicinity of about $15,500 per month being rent of $11,050 per month, living expenses of $4,500 per month plus payment of the wife’s car expenses and Foxtel account. The wife also had access to the husband’s American Express and Visa credit cards.
In August 2010 the lease of the property occupied by the wife at Suburb G expired and she agreed to move into less expensive accommodation. The financial support package at that time fell to about $8,400 per month; comprising rent of $3,900 per month, living expenses of $4,500 per month and access to the husband’s American Express and Visa cards.
In October 2010 the husband cancelled the wife’s access to his credit cards and reduced her living expenses to $3,000 per month leaving her with a package of about $6,900 per month.
These proceedings were commenced in 2011 which was the same year the parties’ marriage was dissolved.
In July 2011 the wife received one months notice to vacate her then accommodation. The wife was unable to obtain new premises on her own and as a consequence Mr E signed a new lease and they moved into that new residence.
In September 2011 the husband ceased making periodic payments to the wife asserting that he was impecunious. Consequently, in October 2011 the wife made an urgent application to this Court for an order for spouse maintenance. Subsequently an interim order was made that the husband pay $10,000 per month to the wife by way of urgent spousal maintenance, pending an interim hearing. The interim spousal application was heard on 18 January 2012 and the husband was ordered to pay periodic spousal maintenance of $6,900 per month.
The husband complied with that order until about October 2012 when he asserted he no longer had funds to meet that obligation. He sought a discharge of the maintenance order as part of these proceedings. The wife now seeks enforcement of the maintenance order and that application has been deferred pending this determination. The husband has paid support for the wife from August 2009 to about September 2012 totalling between $400,000 and $450,000. There were other additional amounts provided via credit card etcetera.
The husband asserts that he has no income and no capacity to make any meaningful property settlement.
The husband gave the wife an engagement ring which cost about $170,000 which the wife sold for $70,000, $40,000 of which the wife used to pay her legal costs and the balance to pay for living expenses including the school fees for her children.
The husband’s failure in his duty to disclose
In family law proceedings there is a clear principal that it is fundamental for each party to make full and frank disclosure of all material and facts to the other party and to the Court. See Black & Kellner [1992] FLC92-287, Weir & Weir [1993] FLC92-338, Vernon & Bosley (No. 2) [1997] 1AllER 614 and Livesey v Jenkins (1985) 1 All E.R. 106, Oriolo –v- Oriolo [1985] FLC 91-653.
The wife believes that the husband is obsessed about defeating her claim and believes that most of his financial concerns are designed for that sole purpose. She claims that he has not been frank with the Court and sets out in her October 2012 affidavit:-
189.On 25 May 2012, the husband’s lawyers sent a letter to my lawyers advising that the husband had been receiving payments (of $30,000 per month) in respect of a loan owing from [BB Securities] which had enabled him to meet his maintenance commitments to date. However, the husband’s lawyers advised:
“The instalments of the loan that have been paid however, are not reliable or consistent and my client has instructed that while he has avoided default to date in respect of these payments, the trench [sic] of monies which he was expecting to arrive in the next month or so is unlikely to be received. Further, none of the other existing receivables of [OO Pty Ltd] or indeed other investments of the [BB] Group are likely to be received and to provide my client with any financial return at all in the foreseeable future if at all.
In order to meet the first instalment of [Ms B’s] valuation costs and then to meet the commitment to pay your client’s costs of the spousal maintenance application my client has no alternative but to sell his [H Make motor vehicle]. You will appreciate the significance of this to him…
The proceeds of sale of this vehicle will be placed into my trust account firstly for the purposes of meeting the first invoice of [Ms B] and secondly to meet your client’s costs due on 29 May 2012.
In the circumstances, we seek your client’s indulgence to delay the payment of the $10,000 costs until [Ms B] forwards her first invoice for payment by my client.”190.On 29 May 2012, I instructed my lawyers to write to the husband’s lawyers declining to consent to delaying the payment of $10,000 to me on account of my costs for the interim spousal maintenance hearing on 18 January 2012.
191.I am informed by my solicitors and verily believe that on 1 June 2012, they received a letter from the husband’s lawyers stating:
“My client instructs he has now been paid another $10,000 into his account from the [BB] Securities Loan. Accordingly, he will be sending the monies into my trust account on Monday…”.
192.On 18 June 2012, the husband paid me $6,500 maintenance, $400 short of the required amount. The husband subsequently paid me the sum of $500 and I promptly returned the overpayment of $100.
193.On 9 July 2012, I instructed my lawyers to write a letter to the husband’s lawyers stating, inter alia: “We are instructed that your client owns a Ducati motor cycle which he has failed to disclose in these proceedings. Please provide full particulars of the motorcycle. It appears appropriate that the motorcycle also be valued by [Mr I] of [J Valuers]”, who was the single expert appointed to value the parties’ motor vehicles.
194.I am informed by my lawyers and verily believe that on 13 July 2012, they received a letter from the husband’s lawyers stating: “My client also instructs that he did omit inadvertently to put the Ducati motorbike in his sworn financial statement. This motorbike has been stored at a friend’s residence for over 12 months and he failed to recall that he had possession of the motorbike when he completed his financial statement. He understands his friend is overseas at the moment and has had some trouble contacting him, but hopes to retrieve the motorbike in the near future for the purposes of a valuation…”
195.On 18 July 2012, the husband paid me $3,000 only by way of spousal maintenance. He paid a further $3,500 on 20 July 2012. There was a shortfall of $400. On 3 August 2012, I instructed my lawyers to send a letter to the husband’s lawyers seeking payment of the shortfall. The husband later paid this amount to me on or about 13 August 2012.
196.I am informed by my lawyers and verily believe that on 13 August 2012, they received a letter from the husband’s lawyers. Inter alia, the letter stated:
“My client instructs that in the process of obtaining information from a [Mr K] in respect of the [AA] (Australia) Group and [AA] Group Pty Ltd, he was reminded by [Mr K] of a golf club membership that was obtained in the mid to late 1990’s at the [L Golf Club]. My client is currently tracing which entity owns this share and whether it has been reflected in the accounts of the group.
This membership is shared with [Mr K] and according to my client it is worth in the vicinity of $115,000 with a 10% surcharge to transfer. This membership is traded on the internet and my client anticipates that his half share… is worth approximately $50,000.
It is my client’s intention to utilise the asset for the purpose of covering legal costs and [Ms B’s] valuation”.197.On 23 August 2012, I instructed my lawyers to write to the husband’s lawyers requesting the husband to confirm what arrangements had been made for the valuation of his Ducati motorcycle. Inter alia, my lawyers also stated: “… our client does not accept that your client is required to sell his [H Make motor vehicle] in order to support himself or meet his financial obligations in these proceedings. If your client chooses to sell his [H Make motor vehicle], the proceeds will need to be accounted for in the proceedings and/or should be deemed as part property settlement in your client’s hands”.
198.I am informed by my lawyers and verily believe that on 24 August 2012, they received a letter from the husband’s lawyers. Inter alia, the husband’s lawyers stated:
“In respect of the Kawasaki [sic Ducati] motor bike, my client after not being able to locate the bike from his acquaintance [Mr M], reported it stolen to … police. It was subsequently located by NSW police and the owner revealed my client’s acquaintance [Mr M] had sold the bike to him for $6,000. Instead of having the bike returned from New South Wales, my client received $8,000 from [Mr M] in compensation which amount has been lodged in my client’s bank account. Details of police personnel in Victoria and New South Wales can be provided.
The monies are being used for living expenses as my client is not receipt of any income. The half share in the golf club membership is on the market I am instructed but is unlikely to achieve anywhere near its full value in this market” [emphasis added].199.On 27 August 2012, I instructed my lawyers to write a letter to the husband’s lawyers. Inter alia:
(a) My lawyers stated that there was some confusion regarding the husband’s motorcycles. I recalled that the husband owned 3 Kawasaki motorcycles (in addition to the Ducati motorcycle) which he had failed to disclose in the proceedings. His friend and business partner, [Mr N], had collected two of the Kawasaki motorcycles for use at his country property. I requested details of these motorcycles. In respect of the allegedly stolen “Kawasaki” motorcycle, my lawyers requested the names of the relevant Police personnel along with the relevant documents, including the Police Report. They also requested the husband’s bank statements evidencing receipt of the alleged $8,000 and the alleged application of those funds. In relation to the “Ducati” motorcycle, my lawyers requested confirmation that arrangements had been made to have the motorcycle valued and noted that it was being stored at the home of the husband’s friend, [Ms O].
(b) My lawyers requested details of the husband’s Mercedes Benz motor vehicle. I recalled that the vehicle had previously been “leased” to [Mr N]. However, I assumed that the husband had now sold the vehicle. I requested a copy of the sale documents.
(c) My lawyers stated that I did not accept that the husband was not in receipt of any income or that he was required to sell assets in order to meet his living expenses. My lawyers stated:“It is clear that your client is embarking on a deliberate course of conduct designed to dissipate the matrimonial asset pool available for division between the parties…
Our client seeks your client’s immediate undertaking that he will not sell, dispose of or otherwise deal with any asset forming part of the matrimonial asset pool without her prior written consent… Your client should not sell the golf club membership without the prior written consent of our client…
Your client should be on notice that our client will be seeking to add back the value of all matrimonial assets which have been disposed of by your client”.200.I am informed by my lawyers and verily believe that on 31 August 2012 they received a letter from the husband’s lawyers. Inter alia:
(a) The husband’s lawyers now claimed that it was the “Ducati” motorcycle which had been stolen. They stated: “…the Ducati motorcycle of my client was not being stored at [Ms O’s] place in [Suburb P]. It was collected from there some 18 months ago and left at [Mr M’s] place in [Suburb Q] from where it was stolen. My client will be providing a copy of the policy [sic] report shortly. As indicated previously the bike was sold to a dealer in Melbourne by the thief and the police tracked it down in NSW. My client obtained $8,000 compensation from the perpetrator. Bank receipt details will be forwarded shortly”.
(b) The husband’s lawyers now claimed that the husband did not own any “Kawasaki” trail motorcycles, but that he owned two old “Yamaha” motorcycles which were stored at his partner’s house in [Town R], Victoria. They stated that they were valued at a couple of hundred dollars each. They also stated that the husband owned a Yamaha 250CC farm bike which he sold to a friend 18 months to 2 years ago for $1,700 and that the funds were used to pay living expenses.
(c) The husband’s lawyers stated that the Mercedes Benz … was sold in early 2011 for $60,000 to pay living expenses including my ongoing maintenance payments.
The wife submits and I accept that the authorities provide that a court need not be overly cautious in its approach to financial affairs of a person if a court is satisfied has not made full disclosure to the court. The husband gave much false information to Ms B.
In her closing submissions counsel for the wife contended that:-[1]
[1] At pages 12 and 13.
He [the husband], or his representative, told her:
PP
That a dispute regarding PP prevented him from delivering documents to her, when the shareholding and directorships had been reinstated;
That lack of equity would prevent the continuation of an endeavour to regain shareholding in PP;
He also deposed in a misleading way as to the PP litigation, at a time when he knew directorships and shareholding had been reinstated, and failed to mention it;
Mr N similarly deposed to the fraud, but did not tell the whole truth:[2]
[2] I do not accept this characterisation of Mr N’s evidence.
MM Limited[3]
[3] As to MM Ltd, I have dealt with this elsewhere and I do not wholly accept this characterisation of this evidence.
That on 14 September 2012 MM Limited was de-listed, but it was not. It was de-listed on 2 November 2012;
That he has received $160,000 from MM Limited as a loan repayment (paid as direct rent on his behalf), which he did not disclose as a capital asset received by him;
That Mr N and Mr S paid his rent when he could not, when in fact MM paid it;
QQ Company
That QQ Company had never traded, but it did. Mr T provided that information;[4]
AA Australia, RR Company and AA Group
That no financials had been produced since 2006 for AA Australia or AA Group, yet those entities have net assets of $3,076,000 and $32,019 respectively, which remain unaccounted for, at that date[5];
Other
He stated in his affidavit filed on 8 November 2011 he had withdrawn $14,000 from his superannuation fund to pay his expenses, but retracted that in viva voce evidence and said he had bought shares with the money;
He alleged a number of significant debts listed above, which were not true;
He could not explain the email to him from BB which established a share transaction in which 6,000,000 shares were to be held on his behalf in trust.
[4] As to QQ Company, I have dealt with this elsewhere and I do not wholly accept this characterisation of this evidence, I note that the Business activity statements annexed to Mr T’s affidavit show no business activity.
[5] The report of Ms B shows that these companies have not traded since 2006 or perhaps earlier and are treated as having a nil value. I have accepted that evidence.
It was submitted by counsel for the wife that the husband’s non-disclosure and misleading statements, both on oath and to the valuer, constitute circumstances justifying an application of the principles expounded in Chang v Su (2002) 29 Fam LR 406 when determining the property.
I have adopted the approach submitted by the wife, insofar as some of the evidence of the husband is concerned.
The evidence
The Wife
The wife relied upon her affidavits filed 16 January 2012 and 21 October 2012. In addition she relied upon her financial statement filed 24 October 2012.
The wife produced, during evidence in chief, an email between the husband and Mr U[6] where she asserts that the husband is owed significant monies from Mr S and Mr N, a sum of somewhere between 2.3 and 2.8 million dollars from each.
[6] Exhibit W1 dated 21 February 2002.
In her financial statement the wife discloses that she lives with her two children and Mr E. She said that Mr E earns about $110,000 per annum. Mr E’s evidence was that he earned about $150,000 per annum.
The evidence of the wife is that Mr E pays $500 per week towards rent and provides some assistance in terms of utilities and food. Having regard to her evidence and the evidence of Mr E, I am satisfied that his contributions are likely to be substantially greater.
The wife pays $900 per calendar month in rent and receives spousal maintenance of $6,900 per calendar month which is currently in arrears.
Her children attend private schools; half the fees are paid by her former husband and the other half by the wife. The school fees are about $14,000 per year.
The wife owns a Porsche motor vehicle which has a value of about $55,000, household contents valued at $9,050 and about $5,817 in her AMP superannuation account. She says she has borrowed $1,400 from Mr E towards rent, however, given the nature of her domestic arrangement with Mr E I do not accept that that sum is a loan. The wife did not seek that allowance in her closing submissions.
As I said earlier, the wife sold her engagement ring and applied about $40,000 in payment of legal fees. I accept her evidence as to the generality of her financial circumstances, insofar as assets are concerned.
The wife is the primary carer of her two children, one of whom has a developmental disorder. The wife says she receives no other financial assistance from the children’s father apart from his payment of half of the children’s school fees.
The wife has minimised the nature of her relationship with Mr E. She formed that relationship in late 2009 and although she says that their accommodation is forced by necessity it is clear that they have been in a serious relationship for some years which includes sharing the same bed.
I accept that the wife’s initial contributions are as set out in her affidavit totalling about $255,000. The wife advanced three amounts to the husband of about $140,000, $40,000 and $30,000. That money has not been returned to her.
The wife said that initially the husband paid her approximately $3,000 per month as housekeeping money, which he said was interest on the loan he had made to Mr V. The wife says subsequently the husband ceased paying her housekeeping money as they had combined their funds.
After the parties commenced living together the wife sold her Volkswagen motor vehicle and purchased a Porsche for $100,000. I accept that the husband encouraged the wife to make these transactions and that the wife at that time believed that the husband was very wealthy.
The wife set out details of her non-financial contributions in paragraphs 24 to 29 of her affidavit filed 24 October 2012. I generally accept that evidence.
The wife does not accept that MM Ltd is likely to go into administration. She believes that the current financial circumstances of the husband are those created by him and are designed to minimise her entitlement to a property settlement. The wife asserts the husband is a highly qualified entrepreneur who in one transaction, albeit some years ago, made a profit of some 20 million dollars. She asserts that the husband is a confident and competent businessman.
The wife said that the husband abused alcohol and had done so during the whole of the relationship. She asserted that this aspect of his behaviour did not impact on his commercial abilities. I am not sure of that later assessment given the state of the husband’s present financial circumstances.
I generally accept the evidence as to the difficulties encountered by the wife as set out above and it is clear that the husband was not being frank about his financial circumstances when dealing with the wife.
The wife says that a significant proportion of the matrimonial asset pool consists of the value of the husband’s equity and loan interests in the Baker Group of companies and trusts. The wife confirms that Ms B of W Accounting Firm was appointed as a single expert in these proceedings to prepare a single expert valuation of the husband’s interest in the Group.
The wife says that on an unconcluded basis, Ms B has found that the net value of the husband’s interest is $3,565,203. The wife says Ms B has noted her opinion is unconcluded on the basis that she has been provided with insufficient information by the husband to reach a concluded opinion regarding the value of the interest held by the husband in the Group. The wife asserts that the husband has failed to provide the relevant information to Ms B and/or has provided incorrect information to her in an attempt to understate his true financial position and resources. Having regard to the comments made by Ms B I am satisfied that the husband was not as frank with the single expert as the Court would expect.
The wife was cross-examined in relation to undertaking courses and her evidence in that regard was unsatisfactory. She prevaricated in relation to what she sought to do and it was clear that she is not anxious to seek paid employment.
Her evidence in respect of her relationship with Mr E was such that she minimised the relationship and that evidence was not impressive. She said she would not ask him for more funds and she would not press him for more funds.
Unsurprisingly the evidence of the wife was coloured by her view of the world. I have some trouble with the veracity of some of her evidence and I will treat it with care.
Mr E
Mr E gave evidence in accordance with his affidavit filed 16 January 2012. He confirmed that his present income is $150,000 per year and he says he received no bonuses or other benefits.
In cross-examination he said that he had an expense account with his company and had meals out on a regular basis. He was entitled to spend about $2,000 per month on that expense account.
Mr E contributes $500 per week to the rent on the couple’s property as he is but one of four people living at that property. He assists with payment towards the cost of utilities. He has a capacity to provide financial assistance at a much greater rate. He says that he is only home for meals about twice per week. This is consistent with the evidence of the wife. I have trouble accepting this evidence. Mr E lives at the premises, spends weekends at the premises and sleeps there almost every night. Although, he says he has Wednesday nights out.
Mr E owns an interest in a property at Suburb Y of about $148,000. He receives rent of $800 per month and pays $1,000 per month towards the mortgage.
He had a tendency to understate the full nature of his relationship with the wife. His evidence was that he moved in with the wife because it was ‘the right thing to do’. He asserts that he is paying modest rent and yet he and the wife share an intimate relationship and have done so for almost three years.
His evidence is coloured by his close and intimate relationship with the wife.
The husband
The husband was not an impressive witness. The husband relied upon his affidavits filed 5 November 2011, 16 January 2012, 17 October 2012, 5 December 2012 and his financial statement of 17 October 2012.
He described his current financial circumstances as ‘diabolical’. He said that MM Limited will be wound up and he will lose his significant investment in that business. MM Limited had been paying the rent for the husband for some time and the husband asserts that he invested significant amounts of his superannuation monies in this Company and those monies will be also be lost. The husband also says that MM Limited is bordering on insolvency. There were problems with supplies and the husband says he understands that the Company will go into receivership or liquidation.
The husband said that he has given a guarantee to Investec Bank for one million, three hundred and fifty thousand dollars and that he anticipates he will be required to pay that sum. On the second day of the hearing he said he had received a notice of default and demand[7] from Investec for that sum. I am not sure that that debt will be pressed given the sale of the public company shell of MM Limited.
[7] Exhibit H2.
The evidence given by the husband was unreliable. He was at times glib, he prevaricated and obfuscated. In these Reasons I will provide a number of examples of this type of evidence however, it is not intended to be a complete list of them.
One such example was when the husband said he had trouble with detail and said he had difficulty with book entries. I do not believe him. The husband was cross-examined in relation to a large quantity of shares called SS Company. The husband said he could not recall any transactions and that he was doing share transfers at the time. When pressed he had some recollection of them and described them as shares that he lost money on.
He was cross-examined in relation to a liability to the T Superannuation Fund. His evidence in this regard was vague. Mr T had given evidence, which I accept, that he bought shares in MM Limited for his superannuation fund and that those shares were registered. I prefer the evidence of Mr T to that of the husband.
I was troubled by his evidence of the offer by BB for the repayment of the $1,350,000 by a payment of $750,000 over a number of years. I have discussed the concerns I have about that offer and Mr Z’s letter elsewhere in these Reasons.
The husband said he relied upon his advisors. The husband was taken to a balance sheet prepared by the Group accountant, Mr X of TT Accounting Firm. He apparently said the balance sheet was incorrect.
That balance sheet indicated that Mr A (one of the husband’s sons) owed him $100,000 when in fact it was allegedly the other way around. The husband, when pressed on some of these issues, said he could not do financials and that it was or gave him a headache. I do not believe him and I do not believe that he does not understand the structures of his businesses, corporate and trustee entities. The reason for this is that on many occasions the husband was able to read and understand figures and on other occasions when it was of an embarrassment to him he expressed an inability to understand those sums.
The husband gave contradictory evidence in relation to the amount of money he owned to his son Mr A, as to whether money had been paid back or not paid back. However, Mr A swore an affidavit[8] saying that he had loaned $200,000 to PP Asset Company and there was a provision that if it was not repaid his father would repay the amount.
[8] Affidavit of Mr A filed 17 October 2012.
The husband loaned $238,989 to MM Limited. His superannuation fund had advanced $110,000 (according to Mr S, whose evidence I accept).[9]
[9] Annexure RS2 to affidavit of Mr S filed 17 October 2012.
MM Limited had repaid a significant amount of money to the husband (about $160,000) between July 2011 and October 2012 primarily by payment of rent and money paid to the Australian Tax Office.
It is clear that the money in the husband’s superannuation fund has been either loaned to or invested in MM Limited. That money seems to have been lost.
There is a discrepancy in relation to the affidavit evidence of the husband of 8 November 2011 when he said he used $14,000 of the superannuation fund for his own expenses and now says he invested it in MM Limited.
The husband was cross-examined in relation to an email he sent to Mr U in February 2012[10] where he said:-
…I’m looking at some other measures such as selling some of my equity in [PP], re-calling my loans from my partners, in [BB] however these initiatives don’t generate cash in any short term, so I will need to agree with [BB] to meet the short term requirements.
[10] Exhibit W1.
The husband described these as loans to his partners. However, I am satisfied that it was in the context of the money due to the husband by the Partnership and it is not evidence of a personal liability of Mr N and Mr S. Mr N did not regard it as a loan but said that the husband should be paid first out of the profits of the GG Group. I am troubled by the husband’s evidence in that regard, however, I accept the evidence of Mr N and Mr S in that respect.
As to the amount of $390,000 owed to him by Mr V the husband says that Mr V has entered into an agreement under Part X of the Bankruptcy Act 1966 (Cth). The husband’s evidence in this respect was unconvincing. I accept that Mr V may have entered into a Part X agreement but I am concerned that he remains holding money for the husband.
In terms of PP Investments, the husband prevaricated as to why he was going to take proceedings to have his shareholding and directorships restored when in fact it happened some months before. It is clear that some information was provided by him to Ms B in relation to PP which was not accurate.
As to BB, the husband denied passing information on to the single expert that there were no financial statements for the period up to June 2011.
UU Company is a subsidiary of PP. The husband says there was a dispute with the Company.
On re-examination the husband said that if MM Limited had been restructured and privatised he would be unable to participate in the restructure as he would not have any funds to put in and his shareholding would be lost. Thus the shareholding which he was involved in would be lost. I accept that part of his evidence, having regard to the evidence of Mr VV.
As I indicated earlier the husband’s evidence is troubling and I have concerns that it is neither frank nor accurate.
Mr S
Mr S gave evidence in accordance with his affidavits filed 17 October 2012 and 5 December 2012. He is a director in GG Group Pty Ltd and is also the Chief Financial Officer of one of its investments, MM Limited.
He deposes that the husband loaned MM Limited about $239,000 of which some $55,000 was converted to shares in February 2010. The husband’s superannuation fund loaned MM, $ 93,900 four years ago and a further $16,100 in more recent times. Payments have been made by MM to the husband by way of rent, tax etcetera.
Mr S gave evidence as to the difficulties confronting MM Limited and its proposed privatisation. In relation to the PP investment Mr S says he has no funds in which to pursue that litigation. In his later affidavit he confirmed that the husband and/or his entities had no shareholding in MM Limited.
Mr S said that when MM Limited goes into receivership the investors would lose their money but says negotiations have been ongoing. Mr S said he has loaned (either personally or through his superannuation fund) $500,000 to MM Limited and gave a $300,000 guarantee which has been called up. Including his outstanding wages he is owed about one million dollars and he does not expect to get anything. He said he would need to find another job.
His evidence on whether there was a loan by the husband of the 6.8 million dollars was that it was not a personal loan to him or Mr N. In any event his financial circumstances are such that he is unable to pay any such money to the husband or to the husband’s alter egos.
Mr S said his health was poor. He described a number of concerns and appeared quite distraught by the financial circumstances in which he found himself.
In relation to Mr S, I accept that he endeavoured to be frank and straightforward in his evidence. I generally accept his evidence.
Mr T
Mr T gave evidence in accordance with his affidavit filed 17 October 2012.
He confirmed that the affidavit was sworn in front of Mr Legro, the husband’s solicitor, who came to his office. Much was made of this to little purpose.
Mr T says that the husband owes him about $5,000 being half the legal costs in a dispute. He and the husband entered into a Deed of Guarantee with XX Pty Ltd in relation to some investments through QQ Company. That company has not traded profitably. There was an issue as to whether it was trading at all and I am satisfied that it may have operated in a limited sense but did not receive any income.
As a consequence of that there is likely to be a claim on the guarantee which will be made against Mr T and the husband. The guarantee is joint and several. I accept the evidence of Mr T generally (although he is partisan to the husband’s cause) as to the circumstances of QQ Company and where the company currently stands at the present time.
If Mr T is required to repay the $200,000 he may have some basis of an action against the husband although that is not entirely clear from the evidence before me. As such I have not treated it as a liability of the husband.
Mr V
Mr V gave evidence in accordance with his affidavit filed 16 October and sworn 9 October 2012. His evidence was at times aggressive and had a serious degree of avoidance and/or obfuscation.
Mr V confirmed that the husband’s alter ego, OO Pty Ltd loaned him $350,000 in about 1999 and loaned him a further sum of $40,000 in mid 2011. The affidavit says mid 2012; however, Mr V says it was about one year earlier.
Mr V made interest payments of $3,000 per month on the earlier loan. He said he was running a business and arranged for a cheque to be drawn and put in cash as the husband did not want to be paid by cheque. I accept the $3000 per month was paid but I do not believe his explanation as to the use of cash.
There was no cogent explanation as to why the husband had lent Mr V a further sum of $40,000 in mid 2011 or mid 2012 bearing in mind that Mr V’s interest payments had stopped. It beggars belief that the husband, in deep financial trouble and not receiving interest from Mr V would make another large advance.
Mr V also sold the husband’s Mercedes Benz motor vehicle and accounted to the husband for $60,000. There was no independent evidence as to the application of the proceeds of that sale.
Mr V said he has entered into an agreement with his creditors under Part X of the Bankruptcy Act 1996 (Cth). There is some documentary evidence of the Deed apparently made on 27 September 2012, however, the Agreement itself was not provided. Mr V says that he has liabilities to his creditors of about three million dollars which includes $50,000 to his former wife (who has recently had a child), $390,000 to OO Pty Ltd, $400,000 - $450,000 to the Bank of Queensland and the agreement provides for a payment of one cent in the dollar.
I am not satisfied that Mr V was frank with the Court. It is likely that Mr V is holding money for the husband in terms of the loans and the sale of the Mercedes.
Mr N
Mr N provided evidence in accordance with his affidavits filed 19 October 2012. He is one of the partners in the GG Group Limited and is the Chief Executive Officer of MM Limited. He prepared an annual report for that Company certifying that is was solvent as at 28 September 2012.
Mr N says that MM Limited was financially managing although it had trouble with its Chinese suppliers. There were issues over the quality of the goods and they sought an adjustment however, this had meant that earlier in the year there had been a cessation of supply. On 12 October 2012 there was a further cessation of supply.
He said that the staff of MM Limited had been stood down on the Friday before the November 2012 hearing and that their employment would be terminated on Wednesday 14 November 2012.
Mr N is hoping that through discussions with another investor, Mr VV, the Company may well be re-capitalised and survive. This will depend on negotiations between Mr VV, Investec and the Chinese product suppliers.
Mr N said that he guaranteed a loan to MM Limited of about $1.5 million dollars and is owed $300,000 in salary and that the loan to the ANZ Bank was secured by a mortgage over his wife’s home and guaranteed by his wife. The house had a value of about $1.5 or $1.6 million dollars. He said that his wife had other properties but they were encumbered.
In terms of the husband, Mr N said he had met the husband during their association as directors of a recreational organisation. He said this was in about 2007 and that he (Mr N) was a director of a public corporation and in receipt of an income of about one million dollars a year.
Mr N said he went into the GG Group on the basis that he would provide management skills and the husband would provide capital. Mr S told Mr N that he would join him in this venture and they both left well paid jobs to do so.
I generally accept his evidence in that regard. Mr N was impressive in his understanding of the Company and the circumstances which it was going through.
He said that the husband did not ask him for money and did not regard it as being a loan from him to the husband of his so called one-third share. He said it was clear that the husband would be paid his $6.8 million dollars out of the profits and return of capital of the ventures and that the three would then share in any additional profits. He said that was still the case.
In relation to the repayment of the debt of the husband, Mr N said the husband was given no preference as other creditors’ debts were being met as they fell due. He gave evidence about the circumstances of the Chinese Company on about 4 October 2012 which had caused the current cash flow problems.
The effect of the subsequent failure to provide goods was that there was no income and the cash reserves of MM Limited had dried up. He is hopeful that some arrangements could be put in place with MM Limited which would mean that calls were not made on his loan or the others.
In relation to PP he says that there is no chance of getting money out of it bearing in mind its current circumstances.
I accept the evidence of Mr N as being reliable.
Ms B
The breath of fresh air in this case was the evidence of Ms B. She is a forensic accountant who was appointed as the single expert in April 2012 to value the following entities as at 30 June 2011:-
(a)YY Group Pty Limited;
(b)Baker Family Trust, inclusive of its interest in:
(i)NN Pty Limited;
(ii)GG Group Pty Limited; and
(iii)The GG Group Partnership, inclusive of its interest in:
1.EE Pty Limited;
2.UU Company;
3.PP Pty Limited; and
4.PP Asset Company
(c)Baker Management Services Pty Limited;
(d)ZZ Baker Family Trust, inclusive of its interest in:
(i)OO Pty Limited, inclusive of its interest in:
1.OO Trading Pty Limited, inclusive of its interest in:
a.AAA Pty Limited;
2.BBB Pty Limited; and
3.RR Company, inclusive of its interest in:
a.AA (Australia) Pty Limited
4.CCC Unit Trust;
(e)DDD Superannuation Fund;
(f)The EEE Trust, inclusive of its interest in:
(i)AA Group Pty Limited;
(g)The FFF Trust;
(h)QQ Company;
(i)GGG Pty Limited;
(j)HHH Company;
(k)JJJ Pty Limited;
(l)KKK Pty Limited;
(m)LLL Pty Limited; and
(n)MM Limited.
Ms B’s affidavit[11] was read into evidence together with her report of 8 October 2012 which was annexure A to her affidavit. There was no issue as to her qualifications and I am satisfied that her qualifications are such that she well able to provide the expert information and analysis requested in the order for the single expert.
[11] Filed the 8 November 2012.
She made the following comment in relation to her report:-
1.3My valuation of the interests held by the Husband in the [Baker] Family Trust, [NN] Pty Limited and [DDD] Superannuation Fund includes the interests held by those entities in [MM] Limited.
1.4My valuation is unconcluded [emphasis added] as I have not been provided with sufficient information to reach a concluded opinion regarding the value of the interest ultimately held by the Husband in or the recoverability of the loans owing by the following entities:
(a) [PP] Pty Limited (Appendix F);
(b)[UU Company] (Appendix G);
(c) [EE] Pty Limited (Appendix I);
(d) [CC] Pty Limited / [DD] Pty Limited; and
(e) [BB] Group Pty Limited.
1.5I have excluded [MMM] Limited, [NNN] Pty Limited, [OOO] Family Trust and [PPP] Pty Limited from the scope of my report as the Husband does not hold an interest in these entities. Refer to Section 3.0 for further information in this regard.
Ms B included on pages 9, 10 and 11 of her report that the net value of the equity and the loans of the husband as at 30 June 2011 was $3,565,203 (including the husband’s superannuation). Ms B’s assessment was carefully and thoughtfully qualified. She observed that she received inaccurate or conflicting advice and said it was necessary for her to make decisions on the information that was available to her.
There is no criticism of Ms B in relation to the reports she prepared, she did the best she could with the material available and applied a disciplined and professional expert approach to that work.
I accept her evidence however, there are significant underlying facts which have had the consequence of impacting upon the highly qualified conclusions that Ms B reached.
Mr VV
Mr VV relies upon his affidavits filed 19 October 2012 and 5 December 2012. He was initially not required for cross-examination on his first affidavit. He was cross-examined in relation to his second affidavit. Mr VV confirmed that he had been a business associate of the husband for many years and that they were partners in the GG Group. He denied that if the husband became a bankrupt it would cause further damage, he said the damage was already done.
Mr VV was cross-examined in relation to his knowledge of the remedying of the shareholding and directorships in PP. He said that he had relied on the husband and others to advise him in respect of that company but he did not consider that it was viable to take legal proceedings and he did not believe that he would get his money back. I accept his evidence in that regard and I accept that it is unlikely that any money will come to the partners out of PP.
Mr VV provided evidence of the sale of the public company structure of MM Limited to a company in Western Australia. Mr VV explained the transaction and the need to leave the money in the business. In relation to MM Limited he said he invested about $3 million all told and has not received a payment. He gave evidence, which I accept, that it will cost about $50,000 for the structural change to MM Limited (2) including paying staff, an administrator and funding orders and said that to get the Company going again would involve a cash injection of $400,000 to $500,000 over the next four to five months. The husband and his entities will not receive money from these transactions.
I accept his evidence.
Determination of the property issues
The law regarding the treatment of property is under some level of refocus and review following the High Court November 2012 decision in Stanford v Stanford.[12]. Prior to that decision the preferred (although not uncontroversial approach ) was the four step approach reflected by the Full Court in cases such as Hickey v Hickey and the Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143.
[12] [2012] HCA 52, (2012) 293 ALR 70.
In determining the property applications I have had regard to the parties, relationship, marriage and subsequent separation; together with their property transactions during and after the relationship. The parties no longer regard themselves as a couple and the wife has re-partnered. They have engaged in acrimonious litigation for a number of years. Having regard to the particular circumstances of these parties I am satisfied that it is appropriate and just and equitable to consider an alteration of the parties’ rights and interests in their respective property.
The first task is then to identify, according to ordinary legal principles, the existing legal and equitable interests the parties have in property.
Following that task the Court will consider whether, in the circumstances of these parties, it is appropriate and just and equitable for any orders to be made having regard to s79 of the Act. The Court will have regard to the relevant contributions and other matters to be taken into account under s 79(4) of the Act.
The Court will consider, in light of the evidence, whether to make orders for an adjustment of property from the existing interests. As part of that task the Court will have regard to the requirements of s 79(2) of the Act that it is just and equitable in all of the circumstances to make an order under the section.
What can be discerned from the evidence is that the financial circumstances of these parties have been in trouble for a number of years and the rate and the extent of losses has been increasing. Yet, their high spending lifestyles continued despite the obvious financial problems that were the investments made by the husband and the change of circumstances that enveloped their financial world. The wife was oblivious to or disbelieving of the changes to the husband’s investments and pursued phantom assets with unrelenting vigour. She continued to expect the high life. The husband continued with his almost delusional belief in his abilities as an entrepreneur and poured money and resources into failed enterprises. He likewise tried to maintain the illusion of material success and frittered away further assets to that end.
Neither the husband nor the wife was entirely frank in their evidence; the wife denied the extent of her relationship with Mr E and her evidence about re-training and looking for work was risible. The husband tried to hide under the cloak of being a ‘big picture’ person, who left the detail to others, and yet he shifted money around (including emptying his superannuation fund) and he worked in and at some of the businesses. He is an unreliable witness and the extent of any money left will probably never be known. I do not accept that he has been frank in his financial disclosures.
Identification of the existing legal and equitable interests the parties have in property
The wife’s property was not in issue, it comprised of:-
Wife’s chattels and artwork - agreed
$ 9,050
Porsche motor vehicle - agreed
$55,000
AMP Superannuation - agreed
$ 5,817
Total
$69,876
The husband’s property and liabilities were in issue, I have determined they are:-
Legal and/or equitable interest in Baker Family Trust, ZZ Baker Family Trust, OO Pty Limited, EEE Trust, FFF Trust and other non superannuation entities – as valued by Ms B $3,565,203 less superannuation fund.
$3,252,203
Chattels and artwork – agreed
$ 13,580
Pee Wee motor cycles - agreed
$ 1,000
H Make motor vehicle
$ Nil
Ducati motor cycle
$ 8,000
Yamaha motor cycle and 2 Pee Wee motor cycles.
$ 2,700
L Golf Club membership
$ Nil
Mercedes Benz motor vehicle
$ Nil
NNN Pty Ltd
$ 50,000
DDD Superannuation fund
$ 124,886
MLC Masterkey Super – agreed
$ 9,674
Money owing from Mr V
$ 390,000
Credit card liabilities of husband
($ 66,131)
Total
$3,784,912
The total property of both parties amount to $3,854,788. In coming to this conclusion I have determined the property and liabilities of the husband as follows.
Husband’s legal and/or equitable interest in Baker Family Trust, ZZZ Family Trust, OO Pty Limited, EEE Trust, FFF Trust and other non superannuation entities – as valued by Ms B $3,565,203 less superannuation fund - $3,252,203
In these reasons I have tried to explain, as best I can, the complex and complicated financial structures of the husband and his associated alter egos. I am generally satisfied, having regard to the limitations in her report and combined with my finding that the husband has not made full and frank disclosure that the Company and trust structures have a value of $3,252,203.00 as determined, in a qualified way, by Ms B. I have not accepted the larger sum of $3,565,203 as it includes superannuation which I have included elsewhere, and I will not double count that sum.
Counsel for the wife submitted:-[13]
[13] At pages 10 and 11 of wife’s closing submissions
The husband has asserted that MM Limited has no value.
The letter from the husband’s lawyer dated 25 July 2012 to Ms B states that Mr N and Mr S pay the husband’s rent personally if he cannot. This was untrue.
On 17 October 2012, he stated there was a significant risk the company may be wound up (husband’s affidavit, paragraph 29).
The husband’s lawyer stated by letter on 30 October 2012 that MM Limited would be liquidated within the next week.
Senior Counsel for the husband stated, on instructions, at the outset of the case, that an administrator was being appointed for MM Limited as he spoke. He informed the Court that he had received those instructions only half an hour before.
An administrator was in fact not being appointed, nor has one been appointed since that date. The instructions given to Senior Counsel by the husband were not correct.
Mr N confirmed MM Limited was delisted on 2 November 2012, in accordance with a planned strategy.
Mr N signed off on the Chairman’s report dated 28 September 2012, which states, inter alia, that MM Limited 2 has been incorporated, and that MM Limited has obtained loan funds, at arm’s length, to be received by the majority shareholders for the sale of their shares to parties associated with the proposed new directors.
Mr N also provided an “Outlook for 2013” statement, in which he said he remained cautiously optimistic…the business will perform well.
A press release by MM Limited dated 19 November 2012 annexed to the affidavit of Mr S states that the shares in MM Limited 2 are held in the same proportion as those formerly held in MM Limited after an in specie distribution.
There is no independent evidence before the Court of the difficulties and restructuring of MM Limited as alleged by the husband. The only evidence is that deposed to by his business partners, with whom he has close financial association and interdependence.
The affidavits so filed establish share sales of MM Limited have taken place, together with various transfers, and spin off of assets to MM Limited 2, yet no documents are produced at all to elucidate those assertions, nor details pertaining thereto, nor is there any explanation as to how, or why, the majority shareholder of MM Limited 2 can be ousted without any consideration at all.
It is submitted the valuation of Ms B should be adhered to. The husband’s attempts to persuade the Court that his MM Limited holdings have nil value have been fraught with misinformation provided by him or on his behalf, or a lack of cogent information.
Some of these submissions need to be clarified in the light of my findings. The letter from the husband’s lawyer dated 25 July 2012 to Ms B states that Mr N and Mr S pay the husband’s rent personally if he cannot. They did pay his rent but it was in their roles as public officers of MM Limited.
I accept the evidence of Mr S, Mr VV and Mr N that MM Limited was in trouble. The public company structure was sold and the remainder needed to be refinanced, which was what Mr VV said was an asset of the Baker Family Trust. In this trust Ms B valued its interest in MM Limited at $451,000 (NN Pty Limited). Then she went on to value the trust at nil. The husband’s interest in MM Limited appears on the evidence of Mr VV, Mr S and Mr N to be valueless.
I am satisfied that the husband or that of his alter egos has no equity in MM Limited or any of its subsidiaries or successors.
Various chattels
I accept the valuation of the husband and wife’s chattels and artworks, the wife’s Porsche motor vehicle and the Pee Wee motor cycles and the AMP and MLC superannuation funds.
H Make motor vehicle
The wife seeks an add-back of a H Make motor vehicle which has an agreed value of $60,000.
The husband asserted in an affidavit:-[14]
Apart from loan repayments from [MM Ltd] that have been used to pay my rent since July 2011, and monies I have received via the [GG] Group Partnership, being repayments of the transaction asset development loan and monies I earned from [PP] Pty Ltd last year, I have since July 2011, been living on the sale of the assets. These assets included the sale of my [H Make] motor vehicle in July 2012 for which I received $60,000.00.
[14] Filed 17 October 2012 at paragraph 51.
I accept the evidence of the husband that the vehicle was sold to fund his lifestyle and that of the wife (indirectly through maintenance). There is no evidence of any direct financial contribution by the wife to the acquisition of this car. In the circumstances I do not intend to allow this as an add-back.
The parties were in a relationship from about May 2006 until July 2009, a period of about three years.
The wife wishes to continue as a parent of her children of her previous marriage. Albeit that the elder child attains the age of eighteen year in late 2013 and the younger child in three years time.
I have already dealt with the relationship between the wife and Mr E and his financial circumstances in the cohabitation shared by him and the wife.
I have considered the application in the light of the property orders I intend to make.
I am not satisfied an order should be made for periodic or lump sum maintenance in favour of the wife.
On 15 January 2013 the wife filed an application in a case seeking enforcement of the maintenance order made 16 February 2012. That application came before the Court on 29 January 2013 and was stood over generally.
Having regard to the orders proposed to be made by the Court, I propose to dismiss that application as and from twenty eight days after the orders. I will give leave for the wife to apply in relation to that application within that twenty eight day period.
Indemnity
The husband sought an order that he indemnify the wife in respect of all personal tax liabilities to the Australian Taxation Office for any taxation liability of the parties accrued during the relationship between them. I was not addressed on this issue, however, as it is sought by the husband and does not seem to prejudice the wife I see no reason why it should not be made and having regard to the complex and sometimes confusing nature of the husband’s various financial endeavours, it may provide some succour to the wife.
Delay in delivering reasons
These proceedings were heard over a number of days in November and December 2012 and the Reasons were not delivered until early May 2013, a period of about five months. This is an unsatisfactory delay in delivering reasons for judgment and I apologise to the parties.
The problem in relation to this matter was that a request for relisting was made for 29 January 2013 and I had thought that there may be further evidence. Further, the financial structures and arrangements of the husband were such that an extra-ordinary period of time was required firstly to understand the evidence of the main protagonists of the parties and secondly to understand the evidence of Ms B and the limitations on the expert advice that she required.
I certify that the preceding three hundred and thirty two paragraphs (332) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 7 May 2013.
Associate:
Date: 7 May 2013.
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