MERRIN & MERRIN

[2021] FamCA 74

FAMILY COURT OF AUSTRALIA

MERRIN & MERRIN [2021] FamCA 74

FAMILY LAW – PROPERTY –Where the wife seeks a superannuation splitting order and orders for the alteration of the parties property interests – Where the husband seeks no adjustment of parties property interests and contends the interim property distribution is sufficient to constitute a just and equitable distribution of the parties property – Where the husband seeks the wife roll her superannuation account into a new entity – Where the husband provided significantly greater contributions than the wife at the commencement of cohabitation – Where the parties carried out business activities together throughout marriage – Where a two pool approach to the parties assets is adopted – Where the non-superannuation assets were assessed as 70% to the husband and 30% to the wife – Where no section 75(2) adjustment is made in favour of either party – Where no splitting order is made – Orders for the wife to receive a lump sum payment – Orders for the wife to transfer to the husband or his nominee all of her interests in the corporate entries, including loan accounts.

Family Law Act 1975 (Cth) ss 75(2), 79

Rosati and Rosati (1998) 23 Fam LR 288
Stanford v Stanford (2012) 293 ALR 70

APPLICANT: Ms Merrin

RESPONDENT: Mr Merrin

FILE NUMBER: SYC 3991 of 2018

DATE DELIVERED: 22 February 2021

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 16-19 November 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Sansom SC

SOLICITOR FOR THE APPLICANT: Clinch Long Woodbridge Lawyers

COUNSEL FOR THE RESPONDENT: Mr Lloyd SC

SOLICITOR FOR THE RESPONDENT: John R Quinn & Co.

Orders

1. Within 28 days of the date of these Orders, the husband pay to the wife a sum of $2,019,466 (two million and nineteen thousand four hundred and sixty six dollars).

2. Within 28 days of the date of these Orders, the wife do all things and execute all documents necessary to transfer to the husband or his nominee the whole of her interest, including but not limited to shareholdings, directorships and loan accounts, in the entities:

   2.1      B Pty Ltd

   2.2      C Trust

   2.3      E Trust

   2.4      E Pty Ltd.

3. The husband indemnify the wife and keep her indemnified in relation to any and all liabilities of his entities, including taxation, as follows:

   3.1      B Pty Ltd

   3.2      C Trust

   3.3      C Trust No. 2

   3.4      C Pty Ltd

   3.5      F Partnership

   3.6      E Trust

   3.7      E Pty Ltd

   3.8      G Pty Ltd.

4. Within 28 days of the date of these Orders the wife will:

   4.1do all things and execute all documents required to create a new superannuation fund and

   4.2provide the F Super Fund with a request to roll over 100% of her member entitlement to the new fund

   4.3otherwise do all things and execute all documents necessary to remove the whole of her member entitlements in the F Super Fund and to roll over such entitlements into the new fund created pursuant to these Orders

   4.4the husband and the wife, as directors of F Super Pty Ltd as trustee for the F Super Fund acknowledge that they have been accorded procedural fairness and that this Order binds the trustee of the F Super Fund

   4.5following compliance with this Order, the wife resign as a director of F Super Pty Ltd and transfer her shareholding in that company to the husband.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Merrin & Merrin has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 3991 of 2018

Ms Merrin

Applicant

And

Mr Merrin

Respondent

REASONS FOR JUDGMENT

The proceedings

1. The applicant wife, Ms Merrin, and the respondent husband, Mr Merrin, are parties to litigation concerning alteration of property interests.  The applicant wife sought orders which may be summarised as follows:

   1.        The husband pay to the wife a sum of $3,351,731;

   2.The wife receive the benefit of a splitting order of $74,000 in relation to the husband's interest in the F Super Fund.

2. The respondent husband proposed that the wife receive no lump sum payment in addition to an amount of $1,125,000, which she received by way of partial property settlement orders made on 25 August 2020.  The husband sought orders to the effect that the wife cause her account in the F Super Fund to be rolled into a new entity.

Background

1. The husband and the wife, who are aged 57 and 49 respectively, commenced cohabitation in May/June 2002 and married in 2002.  They separated in March or April 2018 but continued to occupy the same residence until 5 June 2018.  On that date, an incident between the parties resulted in a charge of assault occasioning actual bodily harm against the husband and the issue of an Apprehended Violence Order for the protection of the wife.  The parties were divorced by way of an order made in 2019.

2. The husband holds a Bachelor degree and has pursued a career as a project manager.  The wife holds a Bachelor degree and was employed at the commencement of cohabitation.

3. When she was 19 years old, the wife established a sole trader business known as J Business, which was initially an animal breeding business.  Since 2015 the J Business has focussed on education of students in relation to animal behaviour.

4. In 1998 the husband entered into a partnership known as F Partnership with Mr M.  This partnership, in which the husband and Mr M each hold a 50% interest, currently owns two parcels of real estate in Suburb JJ.

5. In 1992 the husband and a partner established a business known as K Pty Ltd.  This business provided project management services.  K Pty Ltd employed 14 to 18 staff and operated from office premises in S Street, Sydney which were owned by the husband and his partners ("the S Street property”).

6. The husband undertook two substantial projects with joint venture partners, both of which were managed by K Pty Ltd.  The C Trust held a 4.5% interest in a development known as HH Project at Suburb L and retains ownership of two apartments.  The husband gave uncontradicted evidence that this project was nearing completion when the parties began to live together in mid-2002.

7. The husband's entity known as C Trust No. 2 held a 10% share in a development known as KK Project.  Before construction commenced, the husband and his joint venture partner sold the development approval to LL Company.  The husband's entity received from LL Company three apartments in a building known as NN building by way of payment for its interest in the KK Project development.  These apartments were sold in 2016.

8. The C Trust was established in 2002 and is an entity over which the husband has sole control.  He is the appointor and sole director and shareholder of the trustee company C Pty Ltd.

9. The C Trust No. 2 was established in 2002, with the original trustee being C Pty Ltd, and the husband being the appointor.  The current trustee is G Pty Ltd.  This company was incorporated in 2005, with the husband as sole director and shareholder.

10. In May 2002 the parties purchased jointly the former matrimonial home at N Street, Suburb P for $960,000.  The husband provided the whole of the purchase money and acquisition costs.  This five acre property provided accommodation for several animals which the wife used in the operation of the J Business.

11. The company B Pty Ltd was incorporated in February 2003.  Each of the parties is a director and the owner of 50 ordinary shares.  This company holds significant cash investments.

12. The F Super Fund was established in June 2004, with the husband and the wife as its only members.  They are both directors and shareholders of the trustee company F Super Pty Ltd.

13. The E Trust was established by the husband in 2009.  He is the appointor and sole director of the trustee company E Pty Ltd.  The husband holds 10 ordinary shares and 10 Dividend V-R shares in this company.  The wife holds one Appointor-R share.  The beneficiaries of this trust include the husband and the wife.  The husband's position as appointor gives him sole control of the E Trust.

14. The E Trust undertook a project known as the PP Project, which involved the construction of houses at Suburb Q.  This trust retains ownership of four houses and a parking space and the remaining properties were sold by 2015.

15. The husband gave uncontradicted evidence that he held the following interests in real property at the commencement of cohabitation:

    1.        two apartments at Suburb L held by the C Trust

    2.two apartments at Suburb R held by the F Partnership

    3.a joint venture interest held by C Trust No. 2 in the KK Project development, which was sold to LL Company in exchange for three apartments in the NN building at Suburb T

    4.interest in office premises S Street, Sydney held by the F Discretionary Trust

    5.two apartments in W Street, Suburb T by the F Discretionary Trust

    6.V Street, X City held by the F Discretionary Trust

    7.Y Street, X City held by the F Discretionary Trust

    8.Z Street, CC Town held by the F Partnership

    9.AA Street, Suburb BB held by the F Discretionary Trust.

16. The husband gave uncontradicted evidence that he owned shares in public companies, a motor vehicle and a motorcycle at the commencement of cohabitation.  He also had a superannuation benefit and working capital.  He held an interest in K Pty Ltd, which was sold in 2005.

17. In 2003 the parties established a apparel business known as H Pty Ltd.  The wife managed the day-to-day operations of this business for eight years.  In 2012 H Pty Ltd was sold for $300,000, in circumstances where the husband claimed that the parties suffered a financial loss.

18. In July 2005 the husband sold the S Street property for $1,608,500.  The CC Town property was sold for $550,000 in 2003 and the X City properties for $900,000 in 2004.  In 2007 the husband sold the Suburb BB property for $860,000 and the two apartments in W Street, Suburb T for $777,500.  In 2016 the three apartments in the NN building were sold for a total price of $3,635,000.

19. After the sale of H Pty Ltd, the wife expanded the operations of the J Business to include a role in education of animal owners.  In 2015 the wife stopped the animal breeding function of J Business and focussed on this educational role.  The J Business operates in Australia and internationally by way of video and online technology, as well as in-person tuition.

20. After the incident between the parties on 5 June 2018, the husband was charged with assault occasioning actual bodily harm and an AVO issued for the protection of the wife.  The husband defended this charge unsuccessfully and was convicted by the Local Court in January 2019.  In July 2019 the husband's appeal against this conviction was dismissed by the District Court.  The presiding magistrate described the injuries inflicted upon the wife by the husband as "a raised type haematoma to the top of her head" and "red markings around her neck area".

21. The wife deposed that "immediately following the assault by Mr Merrin on 5 June 2018, I began suffering severe anxiety and stress and began experiencing frequent panic attacks.  I commenced attending upon Ms D for counselling; Ms D is a Clinical Social worker/Psychotherapist.  I was referred to her by Victims Services".

22. Ms D reported that the wife attended "regular" therapy sessions between June 2018 and March 2019 and then consulted her for "sporadic counselling".  Ms D provided a report dated 27 May 2020 and was not required for

    
    

    cross-examination.  Inter alia, Ms D opined that the wife suffers from

    
    

    post-traumatic stress disorder.

23. Since 5 June 2018 the husband has lived in an apartment owned by his parents and the wife has remained in the Suburb P property.  On 25 August 2020 the parties consented to interim orders which provided, inter alia, that the wife transfer to the husband her interest in the Suburb P property and that he pay to her a sum of $1,125,000 by way of partial property settlement.

24. Following these interim orders, the wife purchased a property at a location which she wishes to keep confidential from the husband.  She paid a deposit of $96,000 from her savings and the balance from the sum of $1,125,000 which she received pursuant to the interim orders of 25 August 2020.

The evidence and witnesses

1. The applicant wife relied upon her affidavits sworn on 19 October 2020 and 12 November 2020, together with her Financial Statement of 16 October 2020.  She also relied upon an affidavit and report of Ms D sworn on 26 June 2020.  As noted, Ms D was not required for cross-examination.

2. The respondent husband relied upon his affidavit of 19 October 2020 and Financial Statement of the same date. The husband attempted to rely upon an affidavit and report sworn by Ms FF, a forensic accountant, for which leave had not been obtained in accordance with the Family Law Rules. Counsel for the parties reached agreement that the taxation issues could be addressed by way of questions put jointly to the single expert, Ms DD.

3. The single expert Ms DD, a forensic accountant, prepared valuations of various business entities as at 30 June 2018 and 30 June 2020.  Her two valuation reports were dated 15 August 2019 and 11 November 2020.  Ms DD also prepared a report dated 17 November 2020 in relation to "the taxation consequences of the disposal of assets by the entities that are the subject of my valuation reports, as well as the disposal of the entities".  On 19 November 2020 Ms DD responded to questions submitted to her jointly by the solicitors for the parties (Exhibit 6).  Ms DD was not required for cross-examination.

4. In her report of 11 November 2020 Ms DD summarised her valuation conclusions as follows:

   2.2In my opinion, the value of the interest held by the Husband and the Wife in the entities as at 30 June 2020 is summarised as follows:

Total $	Husband $	Wife $
J Business (refer Appendix E/2, page 18)	378,000	N/A	378,000
C Trust (refer Appendix F/2, page 24)	1,288,000	1,288,000	N/A
C Trust No. 2 (refer Appendix G/2, page 37)	Nil	Nil	N/A
F Partnership (refer Appendix H/2, page 47)	477,000	477,000	N/A
The E Trust (refer Appendix I/2, page 62)	1,880,000	1,880,000	N/A

B Pty Ltd (refer Appendix J/2, page 78)	3,454,000	1,727,000	1,727,000
F Super Fund (refer Appendix K/2, page 91)	606,000	408,000	198,000
Total value of equity interests	8,083,000	5,780,000	2,303,000
Add: Related party loans (refer paragraph 2.7)	931,000	564,000	367,000
Total value of equity and loans	9,014,000	6,344,000	2,670,000

Approach to these proceedings

1. In Stanford v Stanford (2012) 293 ALR 70 the majority of the High Court of Australia held as follows (paragraph 35):

   It will be recalled that s 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.

2. Their Honours further observed as follows:

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

3. I am comfortably satisfied that it is just and equitable that there be orders for alteration of property interests in these proceedings.  The parties' relationship has broken down irretrievably and their marriage terminated by a divorce order made in 2019.  Both parties wish to sever all of their financial involvement.  The application of the Family Law Act 1975 (Cth) (“the Act”) section 79(4) will determine what orders for alteration of property interests, if any, should be made after consideration of all relevant matters.

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

The assets, superannuation, liabilities and financial resources

1. Submissions were made as to the constitution of the Balance Sheet based on an "aide memoire" provided by senior counsel for the wife at the conclusion of the trial.  This document read as follows:

ASSETS
Ownership		Description	Applicants value	Respondents value
1	Husband	N Street, Suburb P	2,250,000
2	Wife	J Business (sole trader entity)	378,000
3	Wife	J Business additional accounts not considered by Ms DD	17,500
4	Husband	Motor vehicle 1 (valued 3/1/19)	180,000
5	Wife	Motor vehicle 3 (included in Item 2 J Business) (valued 30/6/18)	NIL
6	Husband	Motor vehicle 2 (valued 3/1/19)	90,000
7	Husband	Motorbike 1	6,000
8	Husband	MM Bank loan account #...43	NIL
9	Husband	MM Bank account #...71	23,070
10	Husband	NAB account #...22	13,777
11	Husband	NAB iSaver account #...27	2,686
12	Husband	NAB Reward Saver account #...82	1,749
13	Husband	NAB account #...43	NIL
14	Husband	NAB account #...61	100,539
15	Wife	Westpac eSaver account #...49	31,546
16	Wife	Westpac Classic account #...85	4,149
17	Wife	MM Bank Incentive Saver account #...06	NIL
18	Wife	Deposit paid on new purchase	96,000
19	Husband	C Trust (valued 30/6/20)	1,288,000
20	Husband	C Trust No. 2 (valued 30/6/20)	NIL
21	Husband	F Partnership (valued 30/6/20)	477,000
22	Husband	The E Trust (valued 30/6/20)	1,880,000
23	Joint	B Pty Ltd (valued 30/6/20)	3,454,000
24	Husband	Loan payable to Husband by C Trust (valued 30/6/20)	510,723
25	Husband	Loan payable to Husband by B Pty Ltd (valued 30/6/20)	53,307
26	Husband	Loan payable to Husband by The E Trust (valued 30/6/20)	11
27	Wife	Loan payable to Wife by C Trust (valued 30/6/20)	310,638
28	Wife	Loan payable to Wife by B Pty Ltd (valued 30/6/20)	56,511
Total		$11,225,206

ADDBACKS/BALANCE SHEET ITEMS
Ownership		Description	Applicants value	Respondents value
29	W	Interim distribution of funds	1,125,000
30	W	Legal fees paid – NHC & RCH	200,000
31	H	Legal fees paid – NHC & RCH	355,332
Total	$1,680,332

LIABILITIES
Ownership		Description	Applicants value	Respondents value
32	Husband	CGT payable on sale of E Project property	228,329
33	Husband	CGT payable on sale of C Trust properties	297,041
Total	$525,370

SUPERANNUATION
Member		Name of Fund	Type of Interest	Applicants value	Respondents value
34	Wife	F Super Pty Ltd & F Super Fund	Self-Managed Superannuation Fund (Wife's entitlements at 30/6/20)	198,000
35	Husband	F Super Pty Ltd & F Super Fund	Self-Managed Superannuation Fund (Husband's entitlements at 30/6/20)	408,000
Total		$606,000

FINANCIAL RESOURCES
Ownership		Description	Applicants value	Respondents value
36
37
38
39
Total	$0	$0

NETT TOTAL ASSETS (including Addbacks / Balance Sheet Items and Superannuation)
$12,986,168

1. The only dispute in relation to the constitution of the Balance Sheet was whether capital gains tax which would be incurred on the sale of the E Project Properties at Suburb Q and/or the C Trust apartments at Suburb L should be included as liabilities.  In Rosati and Rosati (1998) 23 Fam LR 288 at 314 the Full Court said:

   [6.36] It appears to us that although there is a degree of confusion, and possibly conflict, in the reported cases as to the proper approach to be adopted by a court in proceedings under s 79 of the Act in relation to the effect of potential capital gains tax, which would be payable upon the sale of an asset, the following general principles may be said to emerge from those cases:

   (a)Whether the incidence of capital gains tax should be taken into account in valuing a particular asset varies according to the circumstances of the case, including the method of valuation applied to the particular asset, the likelihood or otherwise of that asset being realised in the foreseeable future, the circumstances of its acquisition and the evidence of the parties as to their intentions in relation to that asset.

   (b)If the court orders the sale of an asset, or is satisfied that a sale of it is inevitable, or would probably occur in the near future, or if the asset is one which was acquired solely as an investment and with a view to its ultimate sale for profit, then, generally, allowance should be made for any capital gains tax payable upon such a sale in determining the value of that asset for the purpose of the proceedings.

   (c)If note of the circumstances referred to in (b) applies to a particular asset, but the court is satisfied that there is a significant risk that the asset will have to be sold in the short to mid term, then the court, while not making allowance for the capital gains tax payable on such a sale in determining the value of the asset, may take that risk into account as a relevant s 75(2) factor, the weight to be attributed to that factor varying according to the degree of the risk and the length of the period within which the sale may occur.

   (d)There may be special circumstances in a particular case which, despite the absence of any certainty or even likelihood of a sale of an asset in the foreseeable future, make it appropriate to take the incidence of capital gains tax into account in valuing that asset.  In such a case, it may be appropriate to take the capital gains tax into account at its full rate, or at some discounted rate, having regard to the degree of risk of a sale occurring and/or the length of time which is likely to elapse before that occurs.

2. In this case, there was no evidence that the husband must sell the Suburb Q and/or the Suburb L properties in order to satisfy a further order for alteration of property interests in favour of the wife.  Pursuant to the interim orders of 25 August 2020 the husband is now the sole owner of the Suburb P property, which is free of capital gains tax as the former matrimonial home of the parties.  The Suburb P property has an agreed value of $2,250,000 and is subject to no encumbrance.  Additionally, the husband has decades of experience in raising capital for commercial purposes.

3. For these reasons I am not satisfied that there is "a significant risk" that the husband will be required to sell any or all of the Suburb Q and Suburb L properties.  Accordingly, I will not include these two amounts of capital gains tax as liabilities in the Balance Sheet.

4. For convenience, I will exclude those items listed as assets to which the parties ascribe a nil value.  Two banks accounts of the husband and one of the wife have nil balances and the husband's interest in the C Trust No. 2 was ascribed a zero value in the draft Balance Sheet.  The wife's motor vehicle 3 was included in the draft Balance Sheet at a nil figure, having been included in the valuation of the J Business entity.

5. Accordingly, I find that the assets, superannuation and liabilities of the parties are as follows:

ASSETS
Ownership			Description			Value
1	H		N Street, Suburb P			2,250,000
2	W		J Business (Sole Trader Entity)			378,000
3	W		J Business additional accounts not considered by Ms DD			17,500
4	H		Motor vehicle 1			180,000
6	H		Motor vehicle 2			90,000
7	H		Motorbike 1			6,000
9	H		MM Bank Account #...71			23,070
10	H		NAB Account #...22			13,777
11	H		NAB iSaver Account #...27			2,686
12	H		NAB Reward Saver Account #...82			1,749
14	H		NAB Account #...61			100,539
15	W		Westpac eSaver Account #...49			31,546
16	W		Westpac Classic Account #...85			4,149
18	W		Deposit Paid on New Purchase			96,000
19	H		C Trust			1,288,000
21	H		F Partnership			477,000
22	H		The E Trust			1,880,000
23	J		B Pty Ltd			3,454,000
24	H		Loan Payable to Husband by C Trust			510,723
25	H		Loan Payable to Husband by B Pty Ltd			53,307
26	H		Loan Payable to Husband by The E Trust			11
27	W		Loan Payable to Wife by C Trust			310,638
28	W		Loan payable to Wife by B Pty Ltd (valued 30/6/20)			56,511
29	W		Partial Property Settlement			1,125,000
30	W		Paid Legal Fees			200,000
31	H		Paid Legal Fees			355,332
Total			$12,905,538
LIABILITIES
Ownership				Description			Value
Total		$Nil
SUPERANNUATION
Member				Name of Fund	Type of Interest			Value
32		W		F Super Fund	Self-Managed Superannuation Fund			198,000
33		H		F Super Fund	Self-Managed Superannuation Fund			408,000
Total				$606,000

The contributions of the parties

1. In terms of the initial contributions made by the parties, the wife conceded an imbalance in favour of the husband.  Their relationship subsisted for sixteen years, however, and they each made contributions of various kinds prior to and after the separation.

2. The husband continued his business activities during the relationship and generated substantial funds.  In cross-examination he said that the PP Project at Suburb Q was his last project.  This development was completed and all but four of the houses and a parking space were sold by 2014 or 2015.

3. Between 2016 and March 2019 the husband was involved in the successful defence of litigation in the Supreme Court against LL Company and his entity G Pty Ltd.  The husband has carried out no development projects since 2014/2015 but he devoted considerable time and effort to the defence of this $15 million action.

4. I accept that the husband worked hard on the development projects throughout most of the parties' relationship and that, thereafter, he was required to concentrate on the defence of the Supreme Court action.  I accept that the husband provided capital for H Pty Ltd by way of a redraw on the mortgage facility secured on the Suburb P property.  The husband provided the whole of the purchase money and acquisition costs for the parties' former matrimonial home.

5. The husband acknowledged that the wife was "very busy" with the H Pty Ltd and J Businesses.  It appeared to be common ground that the husband had little involvement in the H Pty Ltd enterprise until the sale of K Pty Ltd in 2005.  The husband maintained, and I accept, that thereafter he travelled to sporting events and expos as a representative of H Pty Ltd.

6. The husband claimed that H Pty Ltd resulted in a financial loss for the parties.  He attributed blame for this loss to the wife but he played a role in the operation of the business between 2005 and its sale in 2012.

7. The husband contended that he provided significant assistance to the wife with the expansion of the J Business enterprise.  In particular the husband alleged that he introduced a company with marketing expertise and produced online and social media promotional material.

8. I accept that the husband provided valuable assistance to the wife with the operation and expansion of the J Business.  The wife acknowledged the husband's input in a book in relation to J Business, where she wrote "My thanks go to my wonderful husband Mr Merrin, whose support, guidance, enthusiasm and encouragement make this a very special journey".  In cross-examination the wife agreed that the husband "supported me with J Business after 2014".  Specifically, she acknowledged that he "held a video camera, prepared for guests, cared for animals and attended a couple of overseas trips."  She agreed with a proposition that the husband "was a genuine assistant to me in my business".

9. The wife alleged that she played a significant role in the PP Project at Suburb Q.  She deposed that her role consisted of the following tasks:

   21.Between May 2009 and the sale of the houses in June 2014, I was heavily involved in the E project (in addition to other activity that I depose to later).  In particular, relevant to this project, the nature of my involvement was as follows:

   (a)When demolition of the dairy that had occupied started, I attended about fortnightly for 1 hour or two for a site visit, discussing the nature of the development with Mr Merrin.

   (b)Once our construction commenced, I attended the site weekly and when the terraces were approaching lockup stage, even more often.  My visits were normally for an hour or so and always together with Mr Merrin.

   (c)I had a particular interest in the facades, the types of fixtures, internal design and colour palates for the terraces and was intimately involved with Mr Merrin on that aspect of the project.  I attended a meeting with our interior designer at KK Project, selecting some finishes.

   (d)I attended approximately two meetings with our bankers regarding the initial and construction finance.

   (e)I was again heavily involved in the project for the selling of the terraces upon completion.  I took all of the photographs and designed the marketing brochure for the sales of the terraces and during this phase, I was spending up to 3 or 4 hours per day for some weeks preparing and collating the material, editing it, liaising with and then circularising the real estate agents during the selling phase.

   (f)During this phase of our relationship, E Project was Mr Merrin's primary project.  He was anxious and stressed about the financial investment and uncomfortably so.  He was suffering physically with Irritable Bowel Syndrome at the time, which exacerbated his distress.  He had (sic) I conducted quite lengthy daily reviews of the project, particularly in the period 2014 about all aspects of the project, profitability, activity of the agents, presales and all aspects of the development.  At times the project was all-consuming.

   (g)I was not responsible for liaising with the Council or the Architect for the E project.  Those were tasks completely retained by Mr Merrin.  My involvement in those aspects was limited to being a sounding board for Mr Merrin and discussing progress in those arrears (sic) at our many site visits.

10. The husband maintained that the wife did not visit the development site at all during the demolition phase.  He acknowledged that she visited the site with him approximately once per fortnight during the construction phase, whereas he attended every day.  In my view the wife played a greater and more active role in this development than the husband acknowledged, although probably somewhat less significant than the description in her affidavit.

11. In cross-examination the wife conceded that her role in the HH Project development at Suburb L was limited to "providing support to [the husband] with his stress".  She conceded that she "had nothing to do with" the S Street office premises, nor any of the properties owned by the F Discretionary Trust.

12. Senior counsel for the wife submitted that her contributions "were made more difficult for a limited period after the assault".  I accept her evidence as to the subjective impact upon her as set out above in these reasons.

13. As noted, Ms D assessed that the wife suffers from post-traumatic stress disorder.  Ms D opined inter alia as follows:

    In my opinion, Ms Merrin has not felt safe since the assault, and this is the primary reason for the deterioration in her mental state over the past two years.  An important part of this situation is that Ms Merrin is still living on the property where she and Mr Merrin lived.  I understand that the reason for this is that Ms Merrin cannot afford to move anywhere else with her animals.  Ms Merrin is aware that her ex-husband knows where she is and knows her daily routine of caring for the animals.  He knows exactly where to find her if he wants to.  And in addition, she is living in the house where the assault took place, which is full of triggers to the traumatic events.

14. Ms D opined further:

    In fact, she said that despite trying to block out the trauma using all these positive techniques, in fact it is still there underneath and any mention of it brings up an overwhelming response of fear.  From my clinical experience, people who do not feel safe from their attacker continue to feel full of fear and remain hyperalert.  In fact, they are remaining in a form of ‘continuing traumatic stress syndrome’ rather than post-traumatic stress syndrome.  Once they are living in a situation where they feel safe from the attacker, it is easier to participate in psychotherapy and trauma work.

15. On the basis of this evidence of the wife and Ms D, I accept that her contributions were made more difficult for a period following the husband's assault of her in June 2018.  In cross-examination, however, the wife said that currently she works on seven days per week and that there has been a significant increase in the earnings of her business.

16. It is true that the husband introduced into the marriage assets of considerably greater value than did the wife.  Their relationship subsisted for sixteen years, however, and they carried out business activities together during that period.  In my view, the parties provided mutual support to each other in their respective commercial activities.  In particular, I accept the evidence of the wife to the effect that she attempted to ease stress which the husband experienced during his significant projects.

17. I accept that the wife's contributions were rendered more difficult for an unspecified period after the assault perpetrated upon her by the husband.  Her operation of the J Business can only have been more arduous, in circumstances where she was hyper vigilant to and fearful of the threat of the husband's presence.

18. Senior counsel for the wife and the husband respectively contended for contribution findings of 80% and 65% in his favour.  It seems to me that a contribution finding of 80% to the husband places undue weight on the assets which he introduced into the marriage and fails to afford sufficient recognition to the activities and efforts made by the wife for the joint benefit of the parties during the relationship.  On the other hand it seems to me that a contribution finding of 65% to the husband places insufficient weight upon assets which he introduced, when due regard and recognition is afforded to the contributions of the wife.  I find that contribution should be assessed 70% to the husband and 30% to the wife.

Section 75(2) factors

1. The husband is 57 years old and suffers from no health condition which would impair his capacity to generate income.  He has workplace skills and a long history of generating significant amounts of revenue from business activities.  At trial, the husband gave evidence that recently he has begun to investigate the prospect of "much smaller developments".  Accordingly, it seems to me that the husband is in a position to produce an income stream from future development and investment projects if he wishes to do so.

2. There was no admissible evidence from the wife's therapist, Ms D, as to her future capacity to engage in income-generating ventures.  The evidence to which I have referred above, however, leads me to infer that the wife's relocation away from the scene of her trauma and exposure to triggers related to the assault is likely to result in an improvement to her mental health.  If that is so, the wife's capacity to generate income from the activities of her J Business is likely to be enhanced and provide her with financial security and a comfortable lifestyle.

3. The wife has operated the J Business successfully since the separation.  At the time of the trial she employed eight people on a part-time or commission basis.  I have no reason to doubt that she will continue to operate this business profitably for an indefinite period into the future.

4. The husband holds significant assets and, in my view, enjoys a comfortable level of financial security.  The wife is now the owner of an unencumbered property, where she houses herself and operates her business.

5. In my view, the only factor which may favour one party is that the husband holds a much more valuable asset base than does the wife.  On the other hand, the orders which I make will result in the wife receiving a substantial lump sum payment.  Overall, it seems to me and I find that there should be no section 75(2) adjustment in favour of either party.

Conclusion

1. There was little evidence in relation to the superannuation interests of the parties.  The reports of Ms DD indicate that the F Super Fund was established on 1 June 2004 and that its assets consist solely of cash resources.  There was no evidence as to the source of the funds in the respective accounts of the parties, not the period in which they made these contributions.

2. In my view, the safest course is to adopt a "two pool approach" and to treat the superannuation and non-superannuation assets separately.  I would make splitting orders which will result in the wife receiving 30% of the total balance of the F Super Fund.  As appears below, however, a division of the total balance of the F Super Fund so as to vest 30% thereof in the wife would result in a splitting order of $16,000.  It seems to me that the inconvenience of such an order outweighs the benefit to the wife, who is most unlikely to receive any benefit from this result for a considerable period into the future.  I am particularly mindful of the duty of the court "to make such orders as will finally determine the financial relationships between the parties ..." (section 81), given the trauma suffered by the wife as a result of assault at the hands of the husband.

3. The net value of the non-superannuation assets is $12,905,538, of which 70% and 30% equal $9,033,877 and $3,871,661 respectively.  The wife holds or has held the following assets:

($)
1.  J Business Sole Trader Business	378,000
2.  J Business Additional Bank Accounts	17,500
3.  Westpac eSaver Account	31,546
4.  Westpac Classic Account	4,149
5.  Deposit on New Purchase	96,000
6.  Paid Legal Fees	200,000
7.  Partial Property Settlement	1,125,000
$1,852,195

The wife is the notional holder of loan accounts in C Trust and B Pty Ltd but these interests are not tangible assets.  I will order that the wife transfer to the husband or his nominee all of her interests in the corporate entities, including loan accounts.  Accordingly, I will exclude these two accounting entries from the calculation of the lump sum payable by the husband to the wife.

1. 30% of the net non-superannuation assets is equal to $3,871,661 and the wife holds or has received the benefit of net property to the value of $1,852,195.  Accordingly, she required payment from the husband of a sum of $2,019,466 to constitute her entitlement of 30% of the net non-superannuation assets.

2. The total balance of the F Super Fund is $606,000, of which 30% is equal to $182,000.  The wife's account has a balance of $198,000, thus the differential is $16,000.  As indicated above, there is little practical utility or benefit to the wife of a splitting order in such a minor sum.

3. Initially, the husband sought orders for distribution of numerous household contents and chattels between the parties.  These orders addressed 226 items or categories of chattels and were set out in small print on four pages of the Case Outline document of the husband.  In cross-examination, however, the husband said words to the effect:

   Assume chattels are not a massive issue, we will just move on except for my dogs.

4. I note that a submission was put on behalf of the husband, to the effect that there should be a contribution finding of 20% in her favour and no adjustment pursuant to section 75(2) for the benefit of either party.  If Capital Gains Tax is included in the Balance Sheet, in accordance with the husband's case, the net pool of

   
   

   non-superannuation assets has a value of $12,380,168.  20% of that figure is equal to $2,476,034 as she holds or has had the benefit of assets to the value of $1,852,195.

I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 22 February 2021.

Associate:

Date:  22 February 2021