Mestre & Goodman
[2023] FedCFamC2F 1217
•27 September 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Mestre & Goodman [2023] FedCFamC2F 1217
File number(s): PAC 1093 of 2021 Judgment of: JUDGE MURDOCH Date of judgment: 27 September 2023 Catchwords: FAMILY LAW – PROPERTY SETTLEMENT – Where the parties were in a de-facto relationship for a period of 20 months and have one child who was only four weeks old at the time of separation – where the parties acquired a property during the relationship – where the applicant seeks that items of property not be listed on the balance sheet and that there be items notionally added back to the property pool – where this is rejected – where there is significant dispute as to the value of many of the items of property - where valuations have not been obtained despite orders to do so - where the respondent now resides in City F and has primary care of the child who is of tender age – where each of the parties seek an adjustment of property in their favour of 70 percent of the property pool – orders made adjusting property as to 45 percent to the applicant and 55 percent to the respondent Legislation: Family Law Act 1975 (Cth) ss 79SM(4)(d)-(g), 90SB, s90F(3), 90SK, 90SM
Federal Circuit and Family Court of Australia Act 2021 (Cth) s190
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 1.04
Cases cited: AJO & GRO [2005] FamCA 195
Black v Kellner (1992) FLC 92-287
Edgehill & Edgehill [2007] FamCA 1102
Fields & Smith [2015] FamCAFC 57
Gollings & Scott [2007] FamCA 397
Hall v Hall [2016] HCA 23
Horrigan & Horrigan [2020] FamCAFC 25
Kowaliw and Kowaliw [1981] FamCA 70
NHC & RCH [2004] FamCA 633
Norbis v Norbis [1986] HCA 17
Stanford & Stanford [2012] HCA 52
Trevi & Trevi [2018] FamCAFC 173
Weir & Weir [1992] FamCA 69
Division: Division 2 Family Law Number of paragraphs: 136 Date of last submissions: 31 July 2023 Date of hearing: 8 – 10 May 2023, 14 July 2023 Place: Sydney Counsel for the Applicant: Mr Baston Solicitor for the Applicant: Hills Family Law Centre The Respondent: Litigant in person ORDERS
PAC 1093 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR MESTRE
Applicant
AND: MS GOODMAN
Respondent
ORDER MADE BY:
JUDGE MURDOCH
DATE OF ORDER:
27 SEPTEMBER 2023
THE COURT ORDERS THAT:
1.Within 42 days the Applicant pay to the Respondent the sum of $332,060.00.
2.That simultaneously with the Applicant’s compliance with Order 1 above, the parties do all things and sign all documents necessary to transfer to the Applicant at his expense the property located at B Street, Suburb C, being the whole of the land comprised in folio identifier … in the State of New South Wales (“the Suburb C Property”).
3.That contemporaneously with the parties’ compliance with Order 2 above, the Applicant will take all steps and sign all documents necessary, at his expense, to refinance the existing mortgage over the Suburb C property with a mortgage in his sole name.
4.That pending compliance with Orders 1, 2 and 3 above the Applicant shall be solely responsible for and pay all outgoings and expenses for the Suburb C property including the loan in favour of D Bank being registered dealing number … secured by way of mortgage over the Suburb C Property and indemnify the Respondent with respect to same.
5.That pending settlement of the sale of the Suburb C Property, the Applicant shall be restrained by injunction from encumbering, further encumbering or drawing against any loan facility, selling or in any way dealing with the Suburb C Property.
6.In the event of the Applicant’s non-compliance with order 1 above, the parties will thereafter within 7 days of such non-compliance do all acts and things and sign all documents necessary the Suburb C Property to be sold for the best price reasonably obtainable in the following manner:
(a)list the Suburb C Property for sale by private treaty with an agent to be agreed between the parties and failing agreement to be selected by the Applicant from a list of two agents proposed by the Respondent (the Agent) with the costs of and incidental to such appointment (if required) to be paid by the Applicant in the first instance, and the Respondent shall reimburse the Applicant of her 50% of same at settlement;
(b)the sale price at which the Suburb C Property shall be listed shall be mutually agreed upon by the parties or, in the absence of agreement as recommended by the Agent;
(c)the parties shall each co-operate in every way with the Agent including (without limiting the generality of the foregoing):
(i)providing the Agent with a copy of these Orders;
(ii)forthwith instructing the Agent in writing to copy both parties in on all correspondence concerning the sale, feedback from prospective purchasers and any offers;
(iii)making keys available to the Agent;
(iv)allowing inspection of the Suburb C Property at all reasonable times requested by the Agent;
(v)doing or saying nothing to hinder or prevent a sale being effected;
(vi)ensuring the Suburb C Property, including the grounds, is in a neat and clean condition at the time of inspection by the Agent and prospective purchasers; and
(vii)signing all documents requested by the agents in relation to the listing for sale of the Suburb C Property, including but not limited to an Agency Agreement, except a contract or agreement for sale which has not been authorised by the parties’ solicitors.
(d)the parties shall jointly instruct a conveyancer to be agreed between the parties and failing agreement to be selected by the Applicant from a list of two lawyers or conveyancers proposed by the Respondent (the Conveyancer) with such Conveyancer to have the conduct of the sale on behalf of both parties with the costs of and incidental of the Conveyancer to be paid by the Applicant in the first instance, and the Respondent shall reimburse the Applicant of her 50% of same at settlement;
(e)the parties shall each co-operate in every way with the Conveyancer:
(f)the parties shall each execute a contract for sale in the form prepared by the Conveyancer having conduct of the sale; and
(g)neither party may confer on any agent without the consent of the other party any right to any sole or exclusive agency in respect of the Suburb C Property or to any commission.
7.In the event that the Suburb C Property fails to be sold by private treaty within 3 months from the date of these Orders, then the parties shall forthwith do all acts and things and sign all documents as shall be necessary to sell the Suburb C Property for the best price reasonably obtainable in the following manner:
(a)list the Suburb C Property for sale by public auction with the Agent with the costs of and incidental to such appointment to be borne by the Applicant;
(b)the reserve price at which the Suburb C Property shall be listed shall be mutually agreed upon by the parties or, in the absence of agreement as recommended by the Agent; and
(c)otherwise as set out in Orders 6 (c) to 6 (g) inclusive above.
8.That in the event the Suburb C Property still fails to be sold in accordance with Orders 6 and 7 above following an auction pursuant to Order 7 above, then the parties shall continue to hold public auctions for sale, no less than once every 6 weeks, until such time as the Suburb C Property is sold.
9.Upon settlement of the sale of the Suburb C Property the parties shall do all acts and things and sign all documents as shall be necessary to cause the proceeds of sale to be applied in the following manner and order:
(a)in payment of the costs of and incidental to such sale, including legal costs and disbursements, the Agent's commission, valuer's fees and auction expenses;
(b)in payment of the amount required to discharge the mortgage in favour of D Bank being registered dealing number … (the Mortgage) registered over the title of the Suburb C Property;
(c)in payment to the Respondent the sum of $332,060.00 together with interest therein in accordance with Rule 10.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules2021 being the rate that is 6 percent above the cash rate last published by the Reserve Bank of Australia before that period commenced; and
(d)in payment of the balance remaining to the Applicant.
10.That the parties do all things and sign all such documents at the Applicant’s expense to:
(a)register the Applicant as a director of E Pty Ltd;
(b)the Respondent shall execute all documents necessary to assign to the Applicant the whole of the Applicant’s rights, title and interest in any loan account with E Pty Ltd;
(c)the Respondent shall transfer to the Applicant her shares in E Pty Ltd;
(d)the Respondent shall resign as a director of E Pty Ltd;
(e)the Applicant both personally and in his capacity as director of E Pty Ltd upon compliance with these Orders, hereby discharges and releases the Respondent and indemnifies her against any and all manner of actions, suits, cause of actions, arbitrations, debts, dues, costs, interest, tax liabilities (including penalties and interests) and demands whatsoever both at law and in equity which the Company now has or may have at any time or times against the Respondent in respect of any act or thing done or omitted to be done by the parties and E Pty Ltd and each of them respectively up to and including the date of the making of these Orders; and
(f)the Respondent hereby discharges and releases E Pty Ltd and indemnifies it against any and all manner of actions, suits, cause of auctions, arbitrations, debts, dues, costs, interest, tax liabilities (including penalties and interest) and demands whatsoever both at law and in equity which the Respondent now has or may have at any time or times against the Company howsoever arising up to and including the date of the making of these Orders.
11.That within 14 days of the date of these Orders the parties will do all acts and things and sign all documents as shall be necessary to close any jointly held savings accounts with any balance therein to be divided equally between them.
12.That within 14 days of the date of these Orders the parties will do all acts and things and sign all documents as shall be necessary to close any jointly held credit card and/or loan accounts and in the event that any joint credit card or loan account has a balance owing, then the balance owing shall be paid by the Applicant and the Applicant shall indemnify the Respondent in respect of any such liabilities.
13.Pending the parties’ compliance with Order 12 above, the parties be and are hereby restrained by injunction from further encumbering any joint credit card or loan account.
14.Subject to any other order to the contrary, the Applicant is to be solely, legally and beneficially entitled to the exclusion of the Respondent to all other real and personal property of whatsoever nature and kind in his ownership, possession and/or control as at the date of these Orders, including but not limited to money on deposit, shareholdings, insurance policies, motor vehicles and personal effects.
15.Subject to any other order to the contrary, the Respondent is to be solely, legally and beneficially entitled to the exclusion of the Applicant to all other real and personal property of whatsoever nature and kind in her ownership, possession and/or control as at the date of these Orders, including but not limited to money on deposit, shareholdings, insurance policies, motor vehicles and personal effects.
16.In the event that either party fails or neglects to sign any document pursuant to these Orders, a Registrar of the Federal Circuit and Family Court of Australia (Division 2) is hereby appointed to execute such documents in the name of the party in default so as to give validity and operation to these Orders pursuant to s 106A of the Family Law Act 1975 (Cth) upon being satisfied of such failure or neglect by way of affidavit evidence
17.That each party’s costs are reserved for a period of 28 days.
18.Save as to the question of costs, the Initiating Application filed on 2 March 2021 and the subsequent amendments thereto and the Response filed on 17 March 2021 and subsequent amendments thereto are dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MURDOCH
INTRODUCTION
These are proceedings for the alteration of property interests pursuant to section 90SM of the Family Law Act 1975 (Cth) (“the Act”) commenced by the applicant, Mr Mestre.
The parties’ commenced living together in mid-2019 and separated on 3 February 2021; a period of some 20 months. Their only child, X, was born in 2021 and is now two years of age. At the time of separation X was only weeks old. Upon separation she and the mother relocated to City F where they continue to live.
Final parenting orders made by consent on 10 May 2023 provide for the mother to have sole parental responsibility for X subject to the mother considering the father’s views prior to the making of such decisions. X is to live with the mother and spend time with the father on an increasing graduated basis so that by the time she is five years of age she will be spending time with the father each alternate weekend from Friday afternoon to Sunday afternoon during school term and for one half of all school holiday periods as well as on special occasion days. The time spent with the father will vary if the mother relocates with X to live in Sydney.
THE CONDUCT OF THE MATTER
Both parties were legally represented at the final hearing of both property and parenting issues commencing 8 May 2023. The applicant was cross examined at this time. Subsequent to the completion of the applicant’s cross examination it became apparent there was significant issue as to the current value of the property owned jointly by the parties at the Suburb C property”). On 9 May 2023 directions were made to facilitate the provision of updated expert evidence and the property issues only were adjourned on a part heard basis to 14 July 2023 as the single expert was apparently not able to give oral evidence as to the current value of the property. On 10 May 2023 final parenting orders were made by consent.
On 27 June 2023 the applicant filed and served on the respondent a Notice to Admit (“the Notice to Admit”). At this time the respondent was legally represented. The respondent has not, at any time, served a Notice Disputing Fact or Authenticity. At no time has the respondent made an application seeking the court’s leave to withdraw the admissions contained within the Notice, nor has there been a request made of the applicant to consent to a withdrawal. [1]
[1] Rule 8.03.
On 10 July 2023 the respondent filed a Notice of Address for Service listing both her residential and email address. On 12 July 2023 the respondent’s solicitors filed a Notice of Ceasing to Act. I did not require them to appear on 14 July 2023 as they ceased acting for the respondent upon their instructions being withdrawn.[2] At 7:45am on 14 July 2023 the respondent forwarded to my chambers an ex parte communication copying in the applicant’s solicitor requesting an adjournment of the hearing.[3] The request for an adjournment made in this manner was denied. As it appeared that the respondent had not travelled from City F to appear at court in person a Microsoft Teams link was then forwarded to the respondent. The respondent appeared via Microsoft Teams when the matter was first mentioned. The applicant and his legal representatives appeared in person.
[2] Exhibit C1.
[3] Exhibit R2.
The respondent’s oral application for an adjournment of the final hearing was denied and oral ex tempore reasons delivered at this time. During the course of the hearing on this date the respondent conceded that no Notice Disputing Fact or Authenticity the subject of the Notice had ever been filed. After such reasons were delivered the respondent advised the court that she was unable to participate as she was unwell and due to be admitted into hospital in two hours. The applicant advised the court that the respondent was not required for cross examination and the matter could therefore proceed directly to submissions, which would not exceed a two hour period.
The respondent dialled out of the Microsoft Teams link at this time. The matter was adjourned to afford the respondent the opportunity to re-join the proceedings. My associate was able to contact the respondent and have a conversation with her in open court. An email was then forwarded to the respondent at the email address listed in her Notice of Address for Service advising the respondent that she was required to re-join the hearing at 11:45 am.[4]
[4] Exhibit C2.
The respondent did not appear when the matter was re-mentioned at 11:48am. In the circumstances, and so as to afford the respondent procedural fairness, directions were made broadly that: -
·By no later than 4:00pm on 17 July 2023 the applicant was to file and serve:
·a list of the documents relied upon by him in support of the relief sought in the Amended Initiating Application filed on 28 February 2023 with references to specific paragraphs contained therein ;
·a draft balance sheet; and
·any notations or submissions with respect to the Notice to Admit Facts previously served on the respondent.
·By no later than 4:00pm on 24 July 2023 the respondent was to file and serve written submissions in support of the relief sought by her.
·By no later than 4:00pm on 31 July 2023 the applicant was to file and serve any submissions in reply.
·The applicant’s costs arising from the directions required to be made this date were reserved.
It was noted that the court would be reading the single expert’s report valuing the Suburb C property in circumstances where there was no evidence before the court that the expert was put on notice by either party that he was required at the final hearing for the purposes of cross examination. The matter was otherwise stood over for a chambers hearing at 4:00pm on 31 July 2023.
The applicant filed the documents as required on 17 July 2023. The respondent has access to the digital court file via the Commonwealth Courts Portal. No material was ever filed by the respondent in accordance with the directions made, however subsequent to this time she has filed four Notices of Request to inspect material produced under subpoena. The applicant filed his submissions as required on 31 July 2023.
At no time subsequent to the orders of 14 July 2023 has the respondent made application to set aside or vary the directions of the court or communicated with the court in any manner. I thus proceed to determine the matter without the benefit of written submissions by the respondent save for the contentions as set out in her Outline of Case filed on 3 May 2023.
BRIEF BACKGROUND
In these reasons a statement of fact is a finding of fact, unless it is obvious from the context that I am reciting the position of one of the parties.
In accordance with the Notice a brief uncontested chronology is as follows:
·The applicant was born in 1978 and is currently 45 years old. The respondent was born in 1984 and is 38 years of age.
·The applicant separated from his prior partner in late 2018. They have one child together, G who is ten years of age. G spends five nights a fortnight and half of the school holidays with the applicant. G will commence spending six nights a fortnight with the applicant in 2024.
·In 2002 the applicant purchased a property registered solely in his name at H Street, Suburb J (“the Suburb J property”) for the sum of $235,000.
·The parties commenced living together as a couple on a genuine domestic basis at the Suburb J property in mid-2019. At this time the property was encumbered by way of mortgage to K Company of approximately $200,000.
·In approximately early 2020 the parties purchased the Suburb C property for the sum of $1,520,000.00. The total acquisition costs of the property including stamp duty and legal conveyancing fees was $1,590,000. To fund the purchase a loan was secured by way of mortgage registered over the title of the property from D Bank being registered dealing number … (“the mortgage”).
·In early 2020 the E Pty Ltd was registered (“the E Pty Ltd”). Both parties were appointed as directors and each party had a shareholding. E Pty Ltd did not trade and its sole purpose was to invoice the applicant’s employer, L Company for the costs of the applicant’s Motor Vehicle 1. The company has never been registered for Single Touch Payroll or PAYG Withholding. E Pty Ltd operated a single business transaction account with the Commonwealth Bank of Australia that invoiced L Company and upon receipt of payment, serviced all expenses for the Motor Vehicle 1. In late 2022 the applicant resigned his directorship of E Pty Ltd but remains as a shareholder. The respondent is now the sole director.
·In 2021 X was born.
·Upon the parties’ separation on 3 February 2021 the respondent relocated with X to City F. The applicant has continued to live in the Suburb C property.
·These proceedings were commenced by the applicant on 2 March 2021.
·In early 2023 the Suburb J property was sold by the applicant for the sum of $620,000. The net sale proceeds of such sale totalled $219,000. These monies were deposited into a bank account held by the applicant’s mother.
JURISDICTION
The parties resided in New South Wales for the entirety of their relationship. The mandatory geographical requirement pursuant to section 90SK of the Act is satisfied. The mandatory provision as contained in section 90SB of the Act is satisfied as there is a child of the de facto relationship.
THE COMPETING PROPOSALS
The applicant seeks orders that:-
·The respondent transfer all her interest in the Suburb C property to the applicant upon payment to her by the applicant of the sum of $300,000 and the applicant re-financing the D Bank loan to a loan in his own name.
·The applicant assign his shareholding interest in E Pty Ltd to the respondent.
·Each party otherwise retain all property in their respective names, including superannuation.
·The respondent pay the applicant’s costs as taxed.
The respondent seeks orders that:-
·The Suburb C property be sold and the balance remaining after payment of the costs of and incidental to such sale including legal costs and disbursements, the agent's commission, valuer's fees, auction expenses and the amount required to discharge the mortgage be divided:
25.3 …to effect a division of the overall asset pool as follows:-
25.3.1 to the Respondent:
(a) 50% of the overall asset pool as at date of final hearing including
(i) Any monies, shares, debentures, tax credits, superannuation value, non-transferable goodwill managed investments, business assets, indirect investments and direct investments, stood solely or jointly in either the applicant or Respondent’s names, including those standing in either of the Applicant or Respondent’s names as Director, Co-Director, shareholder or Co-shareholder (as confirmed by the Australian Tax Office (ATO) register and/or the Australian Securities and Investment Commission (ASIC) Register).
(b) the sum of $80,000, to provide for:
(i) Applicant’s refusal to authorise the Respondent and the Child to access to the marital home since [early] 2021 for the purposes of removing all personal belongings and moveables of the Respondent and the Child
(1) Second hand value of personal belongings for the Respondent and the child, retained by the applicant since [early] 2021;
(2) Second hand value of jointly owned and all solely owned moveables for the Respondent and Child retained by the applicant since [early] 2021
(ii) Debts minus interest incurred by the Respondent for the provision of third party domestic violence financial support provided during period of maternity leave from 2021 until 2022, per Applicant’s refusal to authorise Respondent access to joint financial resources for the Respondent and Child from [early] 2021 and ongoing
(iii) Debts incurred minus interest due to Applicant’s refusal to authorise the Respondent and the Child to reside in marital home in any capacity from [early] 2021 until [late] 2022 including but not limited to attainment of:
(1) urgent accommodation suitable to Respondent’s specific post-partum requirements and the Child’s specific newborn child requirements.
(2) long term accommodation within reasonable proximity to Respondent’s workplace and Child’s enrolled child care facility, for Respondent and Child mandatory return to Sydney on application of the Applicant.
25.3.2the balance then remaining, to the Applicant.
·That with respect to E Pty Ltd the parties do all things necessary to:-
·register the applicant as the director;
·assign to the applicant all rights, title and interest in any loan account;
·transfer the respondent’s shares to the applicant;
·have the respondent resign as a director
and thereafter the applicant discharges and indemnifies the respondent with respect to any debts or liabilities of the E Pty Ltd.
·That the parties close any jointly held credit cards and/or loan accounts such that the applicant shall be responsible for any pay any such liability owing and indemnify the respondent with respect to same.
·That each party otherwise retain property registered in their respective names.
·That the applicant pay the respondent's costs of and incidental to these proceedings.
THE EVIDENCE
The applicant relied upon:
·The Amended Application for Final Orders filed 28 February 2023;
·The following paragraphs of his affidavit filed 30 March 2023: -
·1-10, 41-43, 46 (last two sentences), 123, 129-144, 215 & 216, 225, 241-276, 278-283.
·The Financial Statement of Mr Mestre filed 30 March 2023;
·The affidavit of Mr M filed 28 April 2023 and 30 May 2023;
·The affidavit of Ms N filed 30 March 2023; and
·The Notice to Admit Facts filed 27 June 2023;
·the document filed on 17 July 2023 in compliance with the directions made on 14 July 2023 (marked now as Exhibit H4). Attached to this Exhibit as “Attachment A” is a further amending balance sheet asserted by the applicant only. This amended balance sheet is now marked as Exhibit H5;
·Written submissions filed by the applicant on 31 July 2023 (now marked as Exhibit H6).
The respondent relied upon the following documents:
·The Amended Response filed on 21 March 2023;
·The affidavit of Ms Goodman filed 24 April 2023;
·The affidavit of Mr O filed 24 April 2023; and
·The Outline of Case filed 3 May 2023.
Whilst the Outline of Case filed by the respondent on 3 May 2023 included a draft Balance Sheet, a further Balance Sheet was filed by the respondent on 31 May 2023. I have assumed in those circumstances that she relies upon the latter, now marked as Exhibit W9.
THE STATUTORY REGIME
In determining claims for alteration of de facto property interests I am required to:
(a)make findings as to the identity and value of the property, liabilities, and financial resources of the parties, or either of them, at the time of the hearing and determine the legal and equitable interests of the parties in such property;
(b)consider, identify and assess the contributions by the parties to the acquisition, conservation and/or improvement of their property, including financial and non-financial contributions and any contributions to the welfare of the family before, during and after the relationship came to an end;
(c)after consideration of altering the interests in the property pool on the basis of contributions, to consider whether there should be any further adjustment to the either of the parties on account of the matters set out in s 79SM(4)(d)-(g) of the Act, including any relevant considerations pursuant to s90F(3) of the Act; and
(d)ensure that the orders to be made are just and equitable in all the circumstances.
DUTY OF DISCLOSURE
The applicant contends that the respondent has not been compliant with her disclosure requirements. The respondent admits that such non-compliance includes the non-provision of all of her bank statements for the period commencing November 2022 –June 2023, her credit card statements for the period February 2021 to March 2021 and from December 2021, and all of her payslips.
Whilst there is a long line of authorities setting out in clear and unequivocal terms the onus on parties to make a full and frank disclosure of all their financial circumstances: Black v Kellner (1992) FLC 92-287, no submissions were made that the respondent has deliberately failed to provide financial disclosure or an intention to hide assets such that I should not be unduly cautious in making findings in the respondent’s favour: see Weir & Weir (1993) FLC 92-338. I find that the effect of any disclosure failures of the respondent was limited to making the process of fact finding as sought by the applicant more difficult.
THE BALANCE SHEET
I have constructed one single draft joint balance sheet with each parties’ contentions as set out in Exhibits H5 and W9. The disputed values are in bold.
Ownership
Description
Applicant’s Value
Respondent’s Value
ASSETS
J
B Street, Suburb C
1,700,000
1,900,000
2.
A
Motor Vehicle 1
48,000
54,075
3.
R
Motor Vehicle 2
15,000
13,528
4.
R
P Company Shares (…@ $98.38 in 5.2023)
3,148
3,148
5.
R
CBA Account #...67
NK
11
6.
A
Q Bank Account #...58
64
64
7.
R
CBA Account #...39
NK
1
8.
A
Q Bank Account #...52
765
765
9.
J
E Pty Ltd
Nominal
Nominal
10.
A
Mestre Pty Ltd
Nominal
Nominal
11.
A
Household Furniture
Nominal
80,000
12.
A
Firearms
3,500
8,000
13.
J
D Bank Offset Account #...07
Nil
Nil
14.
A
Motor Vehicle 3
4,000
10,000
15.
A
Motor Vehicle 4
1,500
1,500
16.
A
L Company
N/A
Not Known
17.
A
R Company Shares
N/A
E15,000
18.
A
S Company Shares
N/A
Not Known
19.
A
Motor Vehicle 5
Nominal
1,900
20.
A
Motor Vehicle 6
N/A
1,600
Total
1,775,977
2,089,592
ADDBACKS
Ownership
Description
Applicant’s Value
Respondent’s Value
A
Transfer of Credit Card Funds by R 2/2021
8,431
NIL
A
Transfer of E Pty Ltd Funds by R 5/2022
600
NIL
23.
A
Transfer of E Pty Ltd Funds by R 7/2022
7,800
NIL
24.
A
Transfer of funds from D Bank home loan by R on 2/2023
3,640
NIL
25.
A
R’s half share of mediation costs with Mr U
2,200
2,200
Total
22,671
2,200
SUPERANNUATION
Ownership
Description
Applicant’s Value
Respondent’s
A
Mestre Family Superannuation
280,000
NK
27.
A
Super Fund 1
57,488
57,488
28.
R
Super Fund 2
285,658
294,487
Total
623,146
351,975
FINANCIAL RESOURCES
Member
Name of Fund
Type of Interest
Applicant’s Value
Respondent’s Value
R
Pro Bono Legal Funding
230,000
NIL
Total
230,000
0
LIABILITIES
Ownership
Description
Applicant’s Value
Respondent’s Value
J
Home Loan (D Bank) …13 (as at 31.5.2023)
562,915
562,230
J
Home Loan offset (D Bank) …21 (as at 31.5.2023)
559,930
558,744
32.
J
D Bank Credit Card
Nil
Nil
33.
A
ATO Tax Liability (as at 30.3.2023)
1,150
1,150
34.
A
T Company (Motor Vehicle 1 vehicle finance as at 30.3.2023)
30,090
NK
35.
A
Q Bank Credit Card …70 (as at 3.5.2023)
7,698
7,698
36.
A
Debt to V Pty Ltd
7,983
7,983
37.
R
CBA Credit Card #...86*
NK
N/A
38.
R
Low Fee CBA Mastercard #...32*
NK
N/A
39.
R
CBA Credit Card #...03*
NK
N/A
40.
R
Low Fee Gold CBA Mastercard CC #...68*
NK
N/A
41.
R
CBA Credit Card #...45
NK
7,135
42.
R
CBA Credit Card #...03
NK
N/A
43.
A
Capital Gains Tax liability following disposal of H Street, Suburb J
85,775
NK
44.
R
Centrelink debt
NK/disputed
5,408
45.
R
Payday loan
NK/disputed
3,000
46.
R
Payday loan
NK/disputed
1,600
47.
R
Loan – Ms W
NK/Disputed
71,000
Total
1,255,541
1,225,948
NET TOTAL ASSETS (including superannuation)
1,396,253
1,217,819
BALANCE SHEET FINDINGS
Save for the Suburb C property, each of the parties in this matter make assertions as to the value of property of the parties absent any evidentiary foundation to support same. It was apparent throughout the course of the proceedings and the trial that there was significant dispute as to the value of many of the specific items of property. Contrary to clear orders and directions made by this court valuations have not been obtained of those items of property that are the subject to a dispute as to their value. Neither party sought an adjournment to allow the obtaining of valuations.
This matter has been on foot since 2 March 2021. Trial Directions were made in the matter on 10 November 2023 with the time for compliance extended pursuant to orders made on 21 February 2023. The parties have had ample opportunity to ensure the evidence that grounds the findings they each seek be made. Having regard to the overarching purpose of the court to facilitate the just resolution of disputes as quickly, inexpensively and efficiently as possible pursuant to s190 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) and Rule 1.04 of the Federal Circuit and Family Court of Australia (Family Law) Rules2021, I will simply have to determine the superannuation and non-superannuation property of the parties as best I can in all the circumstances. Each of the parties are bound by the case they ran at trial and the evidence they relied upon to support it, including omissions.
Items Sought to be excluded from the Balance Sheet:
The applicant submits via Exhibit H5 that there are a number of items of property and liabilities that should be excluded from the property pool:
Due to short relationship, and extensive post separation period, proposed that these property items are excluded from calculation of the property pool.
The applicant made no written submissions in support of this assertion. I am required to determine what, if any, adjustment should be made as to the property of the parties held as at the date of the final hearing. The approach sought by the applicant is rejected.
Items 1 - 20: Assets
Item 1: B Street, Suburb C
The single expert, Mr M valued the Suburb C Property at $1,500,000 as at 30 July 2021. The updated value as at 19 May 2023 is $1,700,000. I accept the unchallenged value.
Item 2: Motor Vehicle 1
The applicant submits by way of Exhibit H5 that the Motor Vehicle 1 and its associated liability (being item 34) should not be listed on the Balance Sheet as the motor vehicle is only registered in his name as his employer, L Company is a foreign based company. The motor vehicle must be sold at the conclusion of his employment.
The applicant does not give evidence as to these assertions. His only evidence is that he arranged his own finance to purchase the motor vehicle and E Pty Ltd was set up for the purposes of invoicing his employer in relation to its costs. The Notice to Admit Facts does not seek any concessions from the respondent with respect to the motor vehicle.
The respondent does not give evidence as to this item. She asserts via Exhibit W9 that: -
·the motor vehicle is registered and insured in the applicant’s name;
·she has not been provided with any evidence contrary to the applicant’s legal ownership; and
·the applicant’s employer is an ASIC Australian Registered Company.
The applicant’s Financial Statement does not depose as to any benefits paid by his employer for any motor vehicle.
In December 2022 the applicant applied to Services Australia to decrease his liability for child support. One of the grounds relied upon was that his necessary expenses for self-support significantly reduces his capacity to support the child. In the determination the Delegate of the Registrar recorded that:
On this basis I do not find [Mr Mestre]’s costs relating to any utilities, his motor vehicle or insurances to be any different to that of other parents and the allowance provided in the self-support amount is fair as applied to all other cases.
The applicant conceded in cross examination that to support his application for a reduction in child support payable by him he provided the Agency with documents to evidence the costs of the car but stated that this was only because he had to cover those costs due to the money taken by the respondent from the E Pty Ltd Commonwealth bank account.
I am not satisfied in circumstances where the applicant is the legal proprietor of the motor vehicle that the applicant has met his evidentiary onus to discharge the presumption that he is the legal and beneficial owner of the motor vehicle. I reject the applicant’s contention that it should be removed from the pool of property available to be adjusted as between the parties.
There is no evidence as to the value of the motor vehicle. The respondent submits on her Balance Sheet: “Median RedBook Valuation.” Not even this evidence is before the court. I accept the value asserted against interest by the applicant of $48,000.
Item 3: Motor Vehicle 2
Neither party has provided any expert evidence as to the current value of the Motor Vehicle 2 registered in the respondent’s name. I accept the value asserted against interest by the respondent of $13,528.
Item 5: Commonwealth Bank Account #...67 and Item 7: Commonwealth Bank Account # …39 in the Respondent’s name
The respondent gives no evidence in her affidavit as to this bank account. Unhelpfully, there is only one bank account in the respondent’s name listed in her most recent Financial Statement and it is described as a Smart Access account with no further particulars provided as to the bank account number.
A Commonwealth Bank statement for the bank account #...67 is annexed to the applicant’s Notice to Admit facts and evidences the value of this account being $14,610 as at 30 April 2021. This does not assist me in any way to determine its current value. Whilst the respondent concedes by way of the applicant’s Notice to Admit that she has not provided full and frank disclosure of this bank account since November 2022, neither party availed themselves of the opportunity to place current evidence before the court, even if the obtaining of such evidence was by way of a Subpoena to Produce Documents.
I accept the values asserted against interest by the respondent of $11 and $1 respectively.
Item 11: Household furniture
The applicant asserts the value of the household furniture owned by the parties is nominal. The respondent asserts the parties’ own household furniture to the value of $80,000. Neither party sought any orders that the furniture be distributed between them other than according to the items they each currently have in their possession. There is no evidence as to the current value of the household furniture and in those circumstances it will be removed from the Balance Sheet.
Item 12: Firearms
Neither party provides any evidence as to the current value of the firearms owned by the applicant. I accept the value asserted against interest by the applicant of $3,500.
Item 14: Motor Vehicle 3
There is no evidence before the court as to the value of this item. I accept the value asserted against interest by the applicant of $4,000.
Item 16: L Company
The respondent deposes that L Company is a subsidiary of a foreign based company and the applicant is a director/shareholder and company secretary. The respondent asserts via her written notes in Exhibit W9 that there has been limited disclosure in relation to this financial entity.
Attached to the Notice to Admit is an Australian Securities and Investment Commission (“ASIC”) search for L Company as at June 2023. The ASIC search evidences that the registered office for this company is B Street, Suburb C. The applicant is listed as a director and secretary of L Company.[5] The applicant is not a shareholder. His evidence is that it is L Company that employs him, although there is no contract of employment.
[5] Notice to Admit, page 183.
There is no evidence that the applicant has any interest in this financial entity. Even if he did, there is no evidence as to the value of such interest. This item will be removed from the Balance Sheet.
Item 17: R Company shares
The only evidence as to R Company shares in the applicant’s name is that contained in Part M of his Financial Statement where he deposes that he has sold a number of R Company shares for the sum of $29,167 and in his affidavit where he deposes that he owned approximately $15,000 of R Company and Y Company Shares at the commencement of the relationship. The applicant provides no evidence as to when the shares were sold, nor how the sale proceeds were disbursed.
The applicant does not own shares in R Company. The respondent did not cross examine the applicant at to the sale and application of funds. No submissions were made that the sale proceeds be notionally added back to the property pool. It will be removed from the Balance Sheet.
Item 18: S Company Shares
There is no evidence to ground this item being present on the balance sheet. It will be removed.
Item 19: Motor Vehicle 5
There is no evidence to ground this item being present on the balance sheet. It will be removed.
Item 20: Motor Vehicle 6
Whilst this item was purchased by the applicant, it is conceded by the respondent that it is unregistered and that it is the property of the applicant’s son. There is no evidence to ground this item being present on the balance sheet. It will be removed.
Contested Add Backs – Items 21- 24
The applicant submits that four sums of money withdrawn by the respondent post separation should be notionally added back to the property pool.
Item 21: Transfer of Credit Card Funds by Respondent on 15 February 2021
It is uncontested that on 15 February 2021 the respondent removed the sum of $8,432 from the joint D Bank Credit card account and transferred the funds into her own personal bank account. The applicant thereafter cancelled the respondent’s credit card. The respondent deposes that she withdrew this money as the applicant was cancelling her access to funds and she needed money to be able to provide for X.
Item 22: Transfer of E Pty Ltd funds by respondent in May 2022
It is uncontested that in May 2022 the respondent mistakenly deposited $6,000 into the E Pty Ltd Commonwealth Bank Account #...68. Upon advising the applicant of this error he advised that the respondent could simply remove the funds. The respondent then withdrew funds totalling $6,600. The applicant seeks that the additional $600 withdrawn be notionally added back to the property pool.
Item 23: Transfer of E Pty Ltd funds by respondent in July 2022
It is uncontested that in July 2023 the respondent withdrew the sum of $7,400 from the E Pty Ltd account.
Item 24: Transfer of funds from D Bank home loan by respondent in February 2023
It is uncontested that in February 2023 the respondent transferred $3,640 out of the parties’ D Bank offset account and deposited it into her personal bank account.
The Full Court in AJO & GRO [2005] FamCA 195 (“AJO & GRO”), identified three clear categories where it may be appropriate to notionally add back an item of expenditure:
·where the parties have expended money on legal fees;
·where there has been a premature distribution of matrimonial assets;
·where there has been a waste, reckless, negligent or wanton dissipation of assets as outlined by Baker J in Kowaliw and Kowaliw [1981] FamCA 70.
Notionally “adding back” items to the asset pool is a discretionary exercise which ought to be the exception rather than the rule: NHC & RCH [2004] FamCA 633. As stated by the Full Court in Trevi & Trevi [2018] FamCAFC 173 at [30]:
…When the discretion is exercised in favour of adding back, it reflects a decision that, exceptionally, in the particular circumstances of a case, justice and equity requires it. The second premise is its corollary: in cases that are not “exceptional” justice and equity can be achieved, not by adding back, but by the exercise of a different discretion — usually by taking up the same as a relevant s 75(2) factor. Indeed, it has been said that the latter is “a course which is, perhaps, technically more correct” than adding back to the list of existing interests in property.
Parties are entitled to reasonably conduct their affairs post separation: Gollings & Scott [2007] FamCA 397. Reasonably incurred expenditure usually does not come within the accepted categories of an “addback”. A party is not expected to be able to provide a precise audit as to every post separation expenditure: Edgehill & Edgehill [2007] FamCA 1102.
The respondent has been on maternity or unpaid leave for periods of time post separation, including a period of twelve months maternity leave. On 11 February 2021 the applicant himself withdrew the sum of $10,000 from the joint bank account. This sum was paid to the applicant’s mother to repay monies that the applicant asserts his mother lent him for medical expenses. At around this same time the applicant refused to pay $50 for a bag for X. In cross examination the applicant agreed that the court should treat his $10,000 withdrawal as a premature distribution. The applicant has not listed this on the balance sheet as a notional add back. Despite conceding that the $8,000 withdrawn by the respondent was to make financial provision for X, the applicant pressed for this sum to be notionally added back to the property pool. The applicant unsuccessfully applied to Services Australia for the $8,000 withdrawn by the respondent to be treated as a non-agency payment so as to reduce his child support liability.
No submissions were made by the applicant as to what category the respondent’s withdrawals fall into as set out in AJO & GRO. No submissions were made as to why the circumstances of this case are exceptional so that justice and equity requires the discretion to be exercised. I am not satisfied that the circumstances of this matter are exceptional such that justice and equity require the monies withdrawn by the respondent to be notionally added back to the property pool as sought by the applicant and these items are rejected. I will return, however to the use and application of funds by both parties post separation and will consider what, if any, further adjustments should be made to the contribution findings later in these reasons.
Item 25: Respondent’s Half Share of Mediation Costs with Mr U
This sum is agreed to be owed to the applicant by the respondent; being her one half share of the costs of the mediator. It should not be on the Balance Sheet as an addback and the sum owing will be deducted from any sum to be received by the respondent and added to any sum to be received by the applicant by way of property adjustment. It will be removed from the Balance Sheet.
Items 26 to 28: Superannuation
Item 26: Mestre Family Superannuation
The respondent via Exhibit W9 submits that this self-managed fund includes real property situate at and known as Z Street, City AA in the state of New South Wales (“the City AA property”) and that: “no statements itemising incomings and outgoings for the Superfund have been disclosed.” [6]
[6] Respondent’s Balance Sheet filed 31 May 2023, item no 46 page 3.
It is conceded that a draft balance sheet which provided for the value of the applicant’s interest in this superannuation fund at $280,000 as alleged by the applicant was served on the respondent on 16 February 2023 and in accordance with the directions of 21 February 2023 confirmed that the expenses of any valuations were to be shared equally. On 29 March 2023 the respondent advised the applicant in writing that she did not require a valuation of the City AA property.
I accept the value of $280,000 as an admission against interest as to the value of the applicant’s interest in this superannuation fund.
Item 28: Super Fund 2
The respondent concedes as to the value asserted by the applicant of her superannuation entitlement as at March 2023, the same date as the value listed for the applicant’s superannuation entitlement in item 27. The higher value listed for the respondent for this item is the value at 31 May 2023. The applicant does not press for this later value to be the value accepted. I accept that it would not be just and equitable to ascribe a higher value to the respondent’s superannuation entitlement as her value is more recent and accept that the value of the parties’ superannuation should each be as at March 2023. Thus this will be $285,658 as conceded by the applicant.
Financial Resources
Item 29: Pro Bono Legal Funding
The respondent deposes that she has received the sum of $230,000 pro-bono legal funding from the Commonwealth Bank of Australia. The respondent asserts that these monies have now been expended. The applicant seeks that such sum be listed on the Balance Sheet as a financial resource. His contention is misconceived. The monies have been expended and there is no evidence that any further sums will be made available; the respondent has exhausted that source of funds: Hall v Hal [2016] HCA 23. This item will be removed from the Balance Sheet.
Items 30 to 47: Liabilities
Item 30: Home Loan (D Bank)
The applicant asserts via his Balance Sheet that the amount owing to D Bank for the home loan as at 3 May 2023 was $562,915. The respondent asserts via her Balance Sheet that the amount owing to D Bank as at 31.05.2023 was $562,230. Neither party drew the court’s attention to any document in evidence to ground either assertion. It is not the court’s role to trawl through hundreds of pages of material attached to the Notice to Admit to ascertain if there is such evidence. The difference is de minimus, however I accept the latter asserted figure of $562,230 as it is logical that in circumstances where the applicant deposes that he has maintained payments on this loan that the amount owed would be decreasing.
Item 31: Home Loan Offset (D Bank)
The applicant asserts via his Balance Sheet that the amount owing to D Bank for the Home Loan Offset as at 3 May 2023 was $559,930. The respondent asserts via her Balance Sheet that the amount owing as at 31 May 2023 was $558,744. Again, neither party drew the court’s attention to any document in evidence to ground either assertion. I accept the latter asserted figure of $558,744.
Item 34: T Company (Motor Vehicle 1 finance as at 30 March 2023)
The respondent simply lists the value of this liability as “not known”. The respondent makes no submissions as to why the value asserted by the applicant should not be accepted in circumstances where it is accepted that, as at 27 March 2023 the motor vehicle had a debt owing of $30,090.88. I accept the value as asserted by the applicant as against interest.
Items 37 to 40 – CBA cards ending #...86, #...32, #...03 and #...68
The applicant asserts the values of these credit cards are “not known”. The respondent asserts the values are “not applicable.”
There is no evidence before the court that such credit cards are still in existence. They will be removed from the balance sheet.
Items 41 and 42: CBA Ultimate Rewards Credit Cards #...45 and #...03
The applicant simply lists the value of this liability as “not known” but makes no submissions as to why the value asserted by the respondent should not be accepted. The respondent was not cross examined as to these assertions. I accept the values as asserted by the respondent as an admission against interest.
Items 45 and 46: PayDay Loans
The respondent asserts two loans totalling the sum of $4,600. Her Financial Statement at number 54 deposes that such loans are from BB Company and CC Company – short term loans. The applicant simply states on his balance sheet that such assertions are “not known/disputed.” There is no corroborative evidence before the court to support such an assertion, however in circumstances where the applicant did not ask any questions of the respondent as to this assertion, I accept this liability as asserted.
Items 47: Monies owed to Ms W (respondent’s mother)
The respondent deposes that she has borrowed a further sum of $85,000 which has been expended by her on legal fees. She is required to repay this sum and to date has repaid the sum of $23,000 by way of regular payments.
In circumstances where the monies borrowed by the respondent were applied to legal fees, I am not satisfied that this asserted liability should be on the balance sheet and it is rejected.
Item 43: Capital Gains Tax Liability
The applicant received the sum of $219,242.05 from the sale of the Suburb J property. From this sum the applicant deposes that he deposited the sum of $85,775 with the Australian Taxation Office “to account for my estimated Capital Gains Tax Liability”. However in cross examination the applicant quibbled with the use of the word “deposited” with respect to the money being paid to the Australian Taxation Office and when asked how the monies received by him from the said sale were applied he stated: “All the money from the sale went to my mother to repay her.” This payment will be discussed later in these reasons.
In any event, in circumstances where the respondent admitted by way of the Notice to Admit Facts that the applicant has an instalment payment arrangement with the Australian Taxation Office to pay $85,775 for capital gains tax for the sale of the Suburb J property, this liability of the applicant has been conceded.
Item 44: Centrelink Debt
The respondent deposes as to this liability in her Financial Statement filed on 31 March 2023 as:
Centrelink Family Tax Benefit 2012-2022 and Newborn Allowance Overpayment in 2012 – repayments required - $4,732.26
It would appear that this evidence contains a typographical error in circumstances where X was born in 2021 and the respondent has no other children. There is no evidence to support the assertion as recorded only on the respondent’s balance sheet that the liability is now $5,408. The respondent was not challenged as to her asserted liability to Centrelink. I accept the evidence as deposed in her Financial Statement that the respondent has this liability of $4,732.26. I do not accept the unsworn assertion that the amount owing is $5,408.
Conclusion as to the Property Pool
Accordingly, I find that the property pool consists of assets and liabilities as follows:-
Ownership
Description
Value Found
ASSETS
J
B Street, Suburb C
$1,700,000
A
Motor Vehicle 1
$48,000
R
Motor Vehicle 2
$13,528
R
P Company Shares (…) @ $98.38 in 5.2023)
$3,148
R
CBA Account #...67
$11
A
Q Bank Account #...58
$64
R
CBA Account #...39
$1
A
Q Bank Account #...52
$765
J
E Pty Ltd
Nominal
A
Mestre Pty Ltd
Nominal
A
Firearms
$3,500
J
D Bank Offset Account #...07
Nil
A
Motor Vehicle 3
$4,000
A
Motor Vehicle 4
$1,500
Total
$1,774,517
SUPERANNUATION
Member
Name of Fund
Type of Interest
Value Found
A
Mestre Family Superannuation
Self-Managed Super Fund
$280,000
A
Super Fund 1
Accumulation fund
$57,488
R
Super Fund 2
Accumulation fund
$285,658
Total
$623,146
LIABILITIES
Ownership
Description
Value Found
J
Home Loan (D Bank) …13 (as at 31.5.2023)
$562,230
J
Home Loan offset (D Bank) …21 (as at 31.5.2023)
$558,744
J
D Bank Credit Card
Nil
A
ATO Tax Liability (as at 30.3.2023)
$1,150
A
T Company (Motor Vehicle 1 finance as at 30.3.2023)
$30,091
A
Q Bank Credit Card …70 (as at 3.5.2023)
$7,698
A
Debt to V Pty Ltd
$7,983
R
CBA Credit Card #...45
$7,135
R
CBA Credit Card #...03
N/A
A
Capital Gains Tax liability following disposal of H Street, Suburb J
$85,775
R
Centrelink debt
$4,732
R
Payday loan
$3,000
R
Payday loan
$1,600
Total
$1,270,138
NET TOTAL ASSETS (including superannuation)
$1,127,525
I find that the value of the parties’ non-superannuation property is $504,379.00.
I find that the value of the superannuation property is $623,146.00.
The total value of the non- superannuation property and superannuation property of the parties is $1,127,525.00.
The total value at law of property held by the applicant prior to any adjusting order is $552,133.
The total value at law of property held by the respondent prior to any adjusting order is $575,392.
WHETHER AN ORDER ALTERING PROPERTY INTERESTS SHOULD BE MADE
I should only make orders pursuant to s90SM of the Act if I am first satisfied that it is just and equitable to do so. It must not be assumed that the parties’ rights or interests should be different to that which already exists: Stanford & Stanford [2012] HCA 52 (“Stanford”).
I find that the requirements identified in Stanford are satisfied in this matter having regard to:
·The parties in this matter, having lived together bona fide domestic relationship and mixed their finances as a family, have now separated. It is therefore not possible for them to continue to mutually enjoy the accumulated assets.
·Both parties invoke s90SM of the Act seeking orders for property settlement.
·The current legal interest of the parties needing to be changed or adjusted when consideration is given to the contribution and other factors identified below.
It is therefore just and equitable in all the circumstances to make orders pursuant to s90SM of the Act adjusting the financial interest of the parties.
THE ASSESSMENT OF CONTRIBUTIONS
Both parties make assertions as to the value to be ascribed to various items of non‑superannuation property including real property, shares and motor vehicles owned by them at the time they commenced living together with no evidence to support such an assertion. I do not accept the lay opinions as to the retrospective values of any items of property asserted by each of the parties.
At the commencement of cohabitation, the applicant was employed on a full-time basis managing R Company earning approximately $285,000 per annum. He was the legal registered proprietor of a property at Suburb J which had been purchased by him in 2002 for the sum of $235,000. The parties lived together in this property at the commencement of cohabitation. There is no evidence as to the value of this property at this time. At the commencement of cohabitation it had a loan secured by way of mortgage over the property of approximately $200,000. The applicant owned an unknown quantity of shares with R Company and Y Company together with a Motor Vehicle 7. The applicant does not depose in his affidavit as to any superannuation entitlements at the commencement of the relationship. The only facts as to superannuation entitlements admitted by the respondent pursuant to the Notice to Admit is that:-
·The Mestre Family Self-Managed Super Fund existed prior to the commencement of the parties’ de facto relationship.
·The applicant was a member of such fund prior to the commencement of the parties’ de facto relationship.
·The said fund owns real property at Z Street, City AA and is encumbered by a mortgage securing a loan to DD Company.
There is no evidence as to what the applicant’s interest was in the self -managed superannuation fund, nor the value of such interest. There is no evidence nor assertion that the applicant had any superannuation entitlements with Super Fund 1 at the commencement of cohabitation.
The respondent was employed on a full-time basis earning approximately $148,200 per annum. She was the registered proprietor of a Motor Vehicle 2. She deposes that she had savings in the sum of approximately $180,000, superannuation entitlements of approximately $174,000 and no liabilities. The applicant deposes that as at the date of cohabitation the respondent had the sum of $2,819.66 in Commonwealth Bank Account ending #...67 and $26,368.57 in a Commonwealth Bank Account ending #...39 and a MasterCard with approximately $2,200 owing on it. Neither party was cross examined as to the other party’s assertions. By way of the Notice to Admit the respondent has admitted that she had $27,666.78 in savings at the commencement of cohabitation. The respondent has not discharged her evidentiary burden to prove that she had any further savings at this time. By way of the Notice the respondent has admitted that as at 20 June 2019 she had $2,300 owing on a credit card with the Commonwealth Bank. There was no challenge to the respondent’s assertion as to her superannuation entitlements at the commencement of cohabitation. I thus find that at the commencement of cohabitation the respondent had savings of approximately $28,000, superannuation entitlements of approximately $174,000 and a credit card liability of $2,200.
Both parties assert that they purchased various items of furniture. There is no evidence as to the furniture that each of the parties has retained subsequent to separation and such furniture has not been ascribed any value and accordingly I give this little weight.
In late 2019, the applicant received work related bonuses of $33,000 and $75,000 (rounded figures) respectively. In January 2020 the applicant received the sum of $74,971.02 by way of property adjustment from his former wife.
The applicant’s evidence that he paid all outgoings on the property and for joint health insurance for the parties for the eight to nine months the parties lived at the Suburb J property there was unchallenged, and I so find.
The respondent’s evidence that she would regularly buy groceries and household items and make “significant contributions” by way of everyday living expenses whilst living at Suburb J was not the subject of challenge. I accept and find that the respondent would regularly buy groceries and household items during the course of the time the parties lived at the Suburb J property. It was uncontested that the respondent made lump sum financial contributions to the Suburb J property including $2,500 towards the costs of floorboard installation, $2,500 towards the cost of painting and the sum of $12,000 on 24 September 2020 by way of deposit into a bank account.
The Suburb C property was purchased in the names of both parties in early 2020 for the sum of $1,520,000. The total acquisition costs were $1,591,958. A loan was secured by way of mortgage in the name of both parties in the sum of $1,200,000.
It is admitted by the respondent that the applicant paid various sums towards the acquisition costs of the property totalling the sum of $241,958. These sums were paid by the applicant drawing down on the equity he held in the Suburb J property.
It is conceded that the respondent paid various sums between December 2019 and February 2020 towards the acquisition costs of Suburb C totalling the sum of $167,707.67. It was unchallenged that these sums came from the respondent’s own savings account.
Both parties worked full time prior to X’s birth and contributed financially to the household expenses. In addition, each of the parties made lump sum financial contributions including: -
·The applicant paid approximately $65,000 in either lump sum payments to the joint D Bank account and/or towards the cost of renovations.
·Between 18 February 2020 and 10 March 2020 the respondent paid approximately $48,700 in lump sum payments to either the joint D Bank account and/or the applicant’s own personal bank account with Q Bank.
The applicant resigned from his employment with R Company in early 2020. In early 2020 he commenced employment with L Company.
During the course of the parties’ cohabitation the applicant’s son from a prior relationship spent time with the applicant five nights each fortnight. It is uncontested that whilst both parties were employed on a full time basis prior to X’s birth the respondent attended to the majority of the household tasks for the household including G. The parties employed a cleaner to assist once a fortnight and the respondent was otherwise primarily responsible for and attended to:-
·the laundry;
·cleaning and tidying the home;
·purchasing the groceries;
·cooking the meals; and
·payment of the household bills and other administrative tasks.
In addition, the respondent assisted in the care of G including collecting him from school approximately once per week, assisting him with his homework and caring for G in the applicant’s absence.
The parties separated when X was only four weeks of age. As between the parties the respondent has been primarily responsible for her care. The applicant has been able to maintain full time employment subsequent to the parties’ separation as a result of this caregiving by the respondent.
Whilst the applicant has been solely responsible for payment of the expenses of the Suburb C property subsequent to separation, he has had the sole benefit of occupation of the property. The applicant has made two lump sum capital payments to reduce the loan secured by way of mortgage over the property in March and September 2020 totalling $50,000. There is no evidence as to the source of such funds.
Subsequent to separation the applicant made several unsuccessful applications to reduce his child support liability. Whilst the applicant concedes that he “did miss several child support payments” subsequent to the parties’ separation, the applicant did not make any child support payments between June 2022 and April 2023 save for one payment in October 2022. The applicant was in arrears of some $10,000 with respect to same. The applicant paid his arrears prior to the commencement of the final hearing. Thus, for a significant period of time the respondent was solely responsible for meeting the financial needs of X.
The applicant submits that due to the short period of cohabitation and the longer post separation period of approximately 28 months the court should adopt a “three pool approach” where the Suburb C property and its associated loan is contained in one pool, the superannuation property of the parties is contained in a second pool and the remaining individual assets and liabilities of the parties are assigned to a third pool.[7] The applicant’s submissions focus exclusively on the parties’ financial contributions to the Suburb C property and adopt a strict mathematical approach. The applicant submits that an assessment of the financial contributions of each of the parties towards the Suburb C property are 70 percent to the applicant and 30 percent to the respondent. It is difficult to reconcile the approach sought by the applicant with the relief sought by him that he pay to the respondent the sum of $300,000 and the respondent transfer her interest in the Suburb C property to him as this equates to a percentage division of 48 percent to the applicant and 52 percent to the respondent on the basis each retains property in their name or possession currently. I have proceeded on the basis of the percentage adjustment sought by the applicant rather than the specific orders he seeks as to the payment of a lump sum in those circumstances.
[7] The Applicant’s Outline of Case, page 7.
The respondent made no submissions as to what approach should be taken by the court when assessing each parties’ contributions. The Case Outline filed by the respondent in the matter appears to adopt a global approach to a single pool of property of both superannuation and non‑superannuation. The respondent submits that the court would find that the parties’ contributions are 40 percent to the applicant and 60 per cent to the respondent.
Whilst a global approach to the assessment of contributions is generally preferred, this is a discretionary determination: Norbis v Norbis [1986] HCA 17 (“Norbis”). The value of the superannuation property is higher than the value of the non-superannuation property. There is no evidence as to the value of the applicant’s superannuation entitlements at the commencement of cohabitation. It will be a considerable period of time until each of the parties are able to access their superannuation entitlements. In those circumstances, and consistent with the approach of the Full Court in Horrigan & Horrigan [2020] FamCAFC 25, I am satisfied that the proper approach to be adopted to the assessment of contributions is a holistic approach to one single pool of property.
Adopting this holistic approach, I assess the parties’ contributions to the property pool as 60 percent to the applicant and 40 percent to the respondent. By way of cross check in dollar terms this equates to property to the value of $676,515 to the applicant and $451,010 to the respondent. That is a differential of $225,505.
RELEVANT S 90SM(4)(D) – (G) MATTERS
The applicant is 45 years of age and is employed on a full-time basis earning the sum of $4,921 per week gross or $255,892 per annum. He is currently liable for child support in the sum of $354.84 for X and $245 per week for G. G stays with him five nights a fortnight. I cannot be satisfied that the respondent has discharged her evidentiary onus to enable a finding to be made that his current partner lives with him.
The applicant deposes in his affidavit that upon receiving the sum of $219,242.05 from the sale of the Suburb J property he deposited the sum of $85,775 with the Australian Taxation Office and:
I applied the sum of $128,126 of the remaining sum towards repayment of a loan to my mother, [Ms EE]…. I currently owe my mother a further $10,391.12 under the terms of that agreement. [8]
[8] Affidavit of the applicant filed 30 March 2023, paragraph 276.
Such alleged loan agreement is not in evidence. The call made for production of the loan agreement was not answered. The call made for the bank statements evidencing the alleged loan was not answered. The only document in evidence is a letter signed by the applicant’s mother dated 7 April 2021 attached to the Notice to Admit. Such correspondence is addressed: “To whom it may concern” and states that she lent the applicant the sum of $70,000 “several years ago” and has made payments to him in cash of varying amounts and also paid bills on his behalf. It states: -
6. [Mr Mestre] has recently repaid me $60,000
7. [Mr Mestre] still owes me $10,000 as of today’s date.
The applicant’s Financial Statement filed the same date as his trial affidavit affirms his assertion that he owes the sum of $10,391 to his mother and has an estimated capital gains tax liability of $85,775.
Whilst the applicant’s mother was on evidence in the parenting proceedings, she gave no evidence with respect to financial issues.
The applicant’s evidence in cross examination was markedly different. Rather than being applied towards the payment of his estimated liability for capital gains tax arising from the sale of the Suburb J property, the applicant’s oral evidence was that all the net proceeds of sale were paid to his mother; hence he now still has a capital gains tax liability and no remaining funds from the sale. The following exchange took place:
COUNSEL: But you gave all the money – the entirety of the sale proceeds, to your mum?
FATHER: Yes.
….
COUNSEL: As at the date you received the sale proceeds, you owed your mum $219,242.05?
FATHER: I don’t know the number.
….
COUNSEL: And you have not provided in these proceedings any bank statements to show money that has left your mothers account and come to you?
FATHER: That’s not correct.
COUNSEL: Where do we find them in the evidence
FATHER: It’s been provided as disclosure throughout the proceedings.
COUNSEL: I call for those bank statements. Your mother has filed evidence in these proceedings?
FATHER: Yes.
COUNSEL: And nowhere in her affidavit does she make reference, at all, to monies she has loaned you, does she?
FATHER: I don’t know.
COUNSEL: I simply suggest to you that’s because there was no loan with your mother.
FATHER: That’s not true.
COUNSEL: Your decision to sell the [Suburb J] property was a decision you made in order to try and have that asset removed from the property pool in this matter.
FATHER: No.
COUNSEL: And it’s just another attempt by you to try and prevent adequate provision being made by way of property orders for [Ms Goodman] and your daughter.
FATHER: No.
….
COUNSEL: The first Financial Statement you filed in these proceedings was on 2 March 2021?
…
COUNSEL: I’ll show you a copy of that financial statement. Identify in that financial statement where there is any record of a liability to your mother?
FATHER: It’s not in that one.
COUNSEL: So, we can assume then that in 2 March 2021 there was no money owing to your mother?
FATHER: Yes.
COUNSEL: And while you’ve got that in front of you, go to the third page and have a look at what your total salary before tax was, Item 9?
FATHER: Yes.
COUNSEL: And what does it say your weekly income was at that point in time, from your total salary before tax.
FATHER: $5,736
COUNSEL: I’ll show you your financial statement on 3 June 2021 – it refers to it being an updated financial statement. Where do we find on that financial statement reference to loan from your mother?
FATHER: On the last page in Part F.
COUNSEL: Under the heading “expenses paid by others for your benefit?”
FATHER: Yes. And on the last page are the expenses being paid on my behalf.
COUNSEL: Can I ask you to confirm your salary at item 9?
FATHER: $5,736
COUNSEL: You agree with me that Part F of the financial statement deals with expenses being paid on your behalf by other persons – correct?
FATHER: Yes.
COUNSEL: In that Financial Statement you say your mums meeting your bills and credit cards in the amount of $2,359 per week?
FATHER: I don’t know whether it’s a week or a month, I don’t know.
COUNSEL: There’s no commensurate liability that appears in the liability section is there?
FATHER: No.
….
COUNSEL: Did she require you to sell the [Suburb J] property in the lead up to the trial?
FASTHER: I had to pay her back for some of my legal fees she had been paying for ongoing.
COUNSEL: You sold the [Suburb J] property for legal fees?
FATHER: Well, that’s part of it.
COUNSEL: You’ll have to give more of an explanation, because we don’t know what your mum has been paying for. There is no evidence about any of the loans in your mother’s evidence, your evidence or your accountant’s evidence. You say your mother required you to sell the [Suburb J] property, did she?
FATHER: My mother required me to pay back the money she had been lending me.
COUNSEL: And how much did she say to you that you had to pay her back?
FATHER: She didn’t specify an amount.
COUNSEL: Did she send this to you in an email, text message or was it in a conversation?
FATHER: She would’ve spoken to me about it, [Ms N] the accountant would’ve spoken to me about it.
COUNSEL: They would’ve, or they did?
FATHER: They did.
COUNSEL: Did you say to your mum, well look, we’ve got a final hearing in May when property issues are going to be resolved, just wait until that is sorted out and I can pay you back then. Did you ask your mother to delay calling in that loan until your property proceedings were imminently dealt with by this court?
FATHER: Yes
COUNSEL: And this is the same person that is going to lend you money to effect a property settlement with [Ms Goodman] in order to keep the [Suburb C] property.
FATHER: Yes.
COUNSEL: Because in effect, what your mother is going to be doing is giving you back the money you parked with her from the [Suburb J] property isn’t she?
FATHER: Not all of it.
COUNSEL: How much is she going to pay back of the money you parked with her from the [Suburb J] property?
FATHER: I can’t answer that.
COUNSEL: You have been served with a cost notice from your solicitor in the lead up to the trial, correct? A document that is provided to the court that shows what your paid and anticipated legal fees are?
FATHER: Yes
COUNSEL: That document identifies the source of the funds, doesn’t it? That is, the source of funds you have used to pay your legal fees to date.
FATHER: Yes.
COUNSEL: And the source of the funds to date on your costs notice for this trial records that “our clients legal fees and disbursements to date are being paid from his personal income, that is income you’ve received – and from the “contributions of family members.” You agree with me that nowhere there does it relate to loans you have got to family members in relation to your legal fees does it?
FATHER: Yes
COUNSEL: The first time we are hearing about a supposed loan in relation to legal fees is on the second day of your oral evidence in this trial?
FATHER: No.
COUNSEL: There is no loan you owe to your mother
FATHER: That’s incorrect.
COUNSEL: The time and the manner of which you sold the [Suburb J] property was all geared toward trying to have that removed as an asset off the balance sheet.
FATHER: That’s incorrect.
COUNSEL: and when this trial is over, the money you have given to your mother will be returned to you as an asset owned by you.
FATHER: No that’s incorrect.
COUNSEL: And I suggest to you that if there was some form of agreement between you and your mother there would be evidence to that effect in your trial material.
FATHER: That’s incorrect.
Subsequent to this cross examination and whilst the matter was part heard the applicant served on the respondent the Notice to Admit Facts referred to earlier in these reasons. Such Notice had the respondent only admit that:
·Upon the sale of the Suburb J property the sum of $219,242.05 was deposited into the bank account of the applicant’s mother; and
·That the applicant had received accounting advice that the applicant has a debt owing to the Australian Taxation Office in the sum of $85,775 and has an instalment payment arrangement for such monies owing. [9]
[9] Notice to Admit filed by the applicant on 27 June 2023, paragraphs 76 - 79
By way of his latest Balance Sheet, the applicant has now removed the previously asserted $10,391 liability still owing to his mother.
By way of her Case Outline the respondent disputes that a loan exists between the applicant and his mother and contends that the applicant’s conduct in selling the Suburb J property and dispersing the funds was calculated to reduce the pool of assets. I am not satisfied that the applicant discharged his evidentiary burden to enable me to make a finding that there was at any time a loan agreement between he and his mother. I accept and find that historically the applicant has had the benefit of his mother providing him with financial assistance. I am satisfied and find on the applicant’s own evidence that it is probable that this financial assistance will continue to be provided in the future.
Whilst the draft Balance Sheet in such Case Outline seeks to have notionally added back a “not known” figure from the net sale proceeds of the Suburb J property, the later Balance Sheet that I have adopted as set out earlier in these reasons filed by the respondent does not. Whilst such sum is not on the Balance Sheet, I will take into account the disbursal of such funds to the applicant’s mother pursuant to sections 90SF(3)(b) and 90SF(3)(r) of the Act.
The respondent is currently 45 years of age. The respondent gives no evidence as to the status of her employment in her affidavit filed 24 April 2023. In her Financial Statement filed on 31 March 2023 the respondent deposes that she is not in paid employment, her only income being $2 dividend income a week received from her shares with the P Company. An Affidavit filed by Mr O on 24 April 2023 by the mother however deposes that subsequent to the mother resigning her employment in early 2023 she agreed in a subsequent telephone conversation to wait until the conclusion of these proceedings prior to making a decision as to her employment status. It is uncontested that the respondent will “take further leave as required…. [and] now intends to work both from home and in the office.”
Whilst I am unable to make a positive finding that the respondent is currently earning an income, nor am I able to make a positive finding as to her likely future income, this is evidence that the respondent had the responsibility to place before the court. In those circumstances I can only proceed on the basis that it is more probable that the respondent is currently engaged in paid employment and will continue to be so engaged in the future. In circumstances where in early 2023 the respondent returned to paid employment for four days a week, it is more probable that such employment will not be on a full time basis and even if it were full time, her income will be, as it was in the past, less than that of the applicant. The respondent will continue to have the primary care of X who is currently only two years of age.
The respondent has had significant assistance from her employer with the payment of her legal fees of at least $230,000. The applicant has paid legal fees in the sum of at least $341,000 to date. The monies expended by both parties in payment of legal fees is extraordinary having regard to the value of the parties’ property – it equates to more than the value of the non‑superannuation property pool of the parties and at least 50 percent of the value of the total property pool.
The applicant does not submit that there should be any adjustment made to the contribution finding. The respondent submits that there should be an adjustment in the respondent’s favour of 10%.
Holistically and weighing up all the above considerations including the sums of monies each of the parties have had at their disposal subsequent to separation, I am satisfied that an adjustment should be made to the respondent of 15%. That equates to the respondent receiving a further $169,129 of the total property available for adjustment.
JUST AND EQUITABLE AND ORDERS TO BE MADE
I have found that the applicant receives 45% of the net property. This equates to $507,386. The respondent will receive 55% or property to the value of $620,139.00.
The respondent submitted that an order for sale of the Suburb C property should be made in circumstances where the applicant would not agree to obtaining an updating valuation of the Suburb C property. That updated valuation has now been obtained and I am satisfied that in circumstances where the respondent currently lives in City F, the applicant should have the opportunity to retain the Suburb C property.
Each party seeks that the other party retain the parties’ interest in E Pty Ltd. No submissions were made by either party in this regard. Whilst the respondent is now the sole shareholder of this corporation as a result of the applicant unilaterally transferring his interest to her post separation, during the course of the relationship the applicant appears to have control over this entity and it should be retained by him. Thus orders will be made transferring the respondent’s interest to the applicant.
The applicant will therefore receive the following:
Description Value ASSETS (a) The Suburb C property $1,700,000 (b) Motor Vehicle 1 $48,000 (c) Funds held in Q Bank Account #...58 $64 (d) Funds held in Q Bank Account #...52 $765 (e) Mestre Co Pty Ltd NIL (f) E Pty Ltd NIL (g) Firearms $3,500 (h) Motor Vehicle 3 $4,000 (i) Motor Vehicle 4 $1,500 (j) D Bank Offset Account #...07 NIL TOTAL ASSETS: $1,757,829 SUPERANNUATION (k) Mestre Family Self-Managed Super Fund $280,000 (l) Super Fund 1 $57,488 TOTAL SUPERANNUATION: $337,488 LIABILITIES (m) Home Loan (D Bank) …13 (as at 31.5.2023) $562,230 (n) Home Loan offset (D Bank) …21 (as at 31.5.2023) $558,744 (o) D Bank Credit Card Nil (p) ATO Tax Liability (as at 30.3.2023) $1,150 (q) T Company (Motor Vehicle 1 as at 30.3.2023) $30,091 (r) Q Bank Credit Card …70 (as at 3.5.2023) $7,698 (s) Debt to V Pty Ltd $7,983 (t) Capital Gains Tax liability following disposal of H Street, Suburb J $85,775 (u) Cash payment to wife $334,260 TOTAL LIABILITIES: $1,587,931 TOTAL NET ASSET POOL: $507,386
The respondent will receive the following:
Description Value ASSETS (a) Motor Vehicle 2 $13,528 (b) P Company Shares (… @ $98.38 in 5.2023) $3,148 (c) CBA Account #...67 $11 (d) CBA Account #...39 $1 (e) Cash payment from husband $334,260 TOTAL ASSETS: $350,948 SUPERANNUATION (f) Super Fund 2 $285,658 TOTAL SUPERANNUATION: $285,658 LIABILITIES (g) CBA Credit Card #...45 $7,135 (h) CBA Credit Card #...03 N/A (i) Centrelink debt $4,732 (j) Payday loan $3,000 (k) Payday loan $1,600 TOTAL LIABILITIES: $16,467 TOTAL NET: $620,139
Standing back and looking at the distribution of assets on an overall basis, I find that this distribution achieves a just and equitable alteration of the property interests of the parties.
From the payment the applicant is to make to the respondent of $334,260 will be deducted the sum of $2,200 being her liability for the mediator’s costs.
Costs are reserved for 28 days in circumstances where each party sought costs as against the other party.
Orders will be made as set out at the forefront of these reasons.
I certify that the preceding one hundred and thirty-six (136) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Murdoch. Associate:
Dated: 27 September 2023
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