Montoya & Rosales (No 2) - [2024] FedCFamC1F 521

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Montoya & Rosales (No 2) [2024] FedCFamC1F 521

File number: MLC 323 of 2012

Judgment of: MCGUIRE J

Date of judgment: 13 August 2024

Catchwords: FAMILY LAW – PROPRTY SETTLEMENT – Where parties were in a de facto relationship for 10 years – where parties own assets jointly, severally and through corporate entities and trusts – where applicant seeks a division of property – where there are two children of the relationship – order that there be no orders altering the property interests of the primary parties – order that the respondent vacate the property which she resides in - declaration that the assets held by the Entities are not the property of the applicant and respondent – declaration that assets of the Entities are the property of the Entities

Legislation:
Evidence Act 1995 (Cth) s 140

Family Law Act 1975 (Cth) SS 90SM, 90SM(1), (3), (4)(d)‑(g)

Cases cited:
Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337 at 354; [1981] HCA 1

Bevan & Bevan (2023) FLC 93-545; [2013] FamCAFC 116

Chapman & Chapman (2014) FLC 93-592; [2014] FamCAFC 91

Harris & Dewell and Anor (2018) FLC 93-839; [2018] FamCAFC 94

Hickey & Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143

Jones v Dunkel (1959) 191 CLR 298; [1959] HCA 8

Lehrmann v Network Ten Pty Ltd [2024] FCA 369.

Lewis v Condon [2013] NSWLR 99

Public Trustee v Smith [2008] NSWSC 397

R v Watson: Ex parte Armstrong (1976) 136 CLR 248

Stanford & Stanford (2012) 247 CLR 108; (2012) FLC 93-518

Stephens & Stephens and Ors (2007) FLC 93-336; [2007] FamCA 680

Division: Division 1 First Instance

Number of paragraphs: 150

Date of last submissions: 21 June 2024

Date of hearing: 29, 30 and 31 January 2024 and 2, 23 and 24 February 2024

Place: Melbourne

Counsel for the Applicant: Mr Bartfeld KC and Ms Mariole

Solicitor for the Applicant: Collins Law Pty Ltd

Counsel for the Respondent: Mr Geddes KC

Solicitor for the Respondent: Sage Family Lawyers

Counsel for the Intervenor: Mr North SC and Mr Salamanca

Solicitor for the Intervenor: Carew Counsel Solicitors
ORDERS

MLC 323 of 2012

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:
MR MONTOYA

Applicant

AND:
MS ROSALES

Respondent

MONTOYA PTY LTD & MONTOYA EQUITIES PTY LTD AS TRUSTEE FOR THE MONTOYA EQUITIES TRUST

Intervener

ORDER MADE BY:

MCGUIRE J

DATE OF ORDER:

13 AUGUST 2024

THE COURT ORDERS THAT:
1.There be no Orders pursuant to s 90SM of the Family Law Act 1975 (Cth) (“the Act”) altering the property interests of the primary parties in that each of those primary parties retain those assets to which that party holds title or is possessed, but subject to these Orders, and each party be responsible for any liabilities attaching to the assets of that party and liabilities incurred in the name of that party.
2.Pursuant to s 90SL(1) of the Act this Honourable Court declares that the assets of:
(i)Montoya Pty Ltd; and
(ii)Montoya Equities Pty Ltd as trustee for the Montoya Equities Trust;

are not the property of the applicant and/or the respondent and that neither the applicant nor the respondent have any title or rights to such assets.
3.Pursuant to s 90SL(1) of the Act, this Honourable Court declares that the assets of:
(i)Montoya Pty Ltd; and
(ii)Montoya Equities Pty Ltd as trustee for the Montoya Equities Trust;

are the property of the said entities.
4.Pursuant to s 90SL(2) of the Act:
(i)Montoya Pty Ltd and/or Montoya Equities Pty Ltd as trustee for the Montoya Equities Trust have a right to possession of the real property situate at and known as L Street, Town M, in Victoria;
(ii)the respondent, Ms Rosales, vacate the real property at L Street, Town M, in Victoria within 90 days of the date of these Orders leaving such property in good, fit and proper condition and provide vacant possession of the same to Montoya Pty Ltd and/or Montoya Equities Pty Ltd as trustee for the Montoya Equities Trust;
(iii)the respondent, Ms Rosales, remove her personal possessions from the real property at L Street, Town M, in Victoria within 90 days of these Orders; and
(iv)the respondent, Ms Rosales, be restrained by injunction from interfering in any manner whatsoever with the operation of the business conducted upon the property at L Street, Town M, in Victoria.

5.The application by the respondent, Ms Rosales, for property and/or other financial relief as against Montoya Pty Ltd and Montoya Equities Pty Ltd as trustee for the Montoya Equities Trust be otherwise dismissed.
6.All extant applications be otherwise 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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym of Montoya & Rosales has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
McGUIRE J:
THE PARTIES

These are property proceedings with the primary parties being Mr Montoya (“the applicant”), and Ms Rosales (“the respondent”). They were in a de facto relationship between 2009 and 2019 where such de facto relationship was conceded by the applicant only after nine days of litigation before Johns J as to that discrete issue. A declaration was made pursuant to section 90RD of the Family Law Act (Cth) 1975 (“the Act”) on 11 November 2022.
There are two corporate intervenors namely Montoya Pty Ltd and Montoya Equities Pty Ltd as trustee for the Montoya Equities Trust (conveniently referred here as “the [Montoya] group”) where the combined wealth of these corporate entities is, according to the respondent, in excess of $40 million. Orders were made on 7 July 2020 granting leave for the two corporate entities to intervene.
A dominant issue in this litigation is the respondent’s contention that the assets of the intervenors be included in the property pool for consideration and alteration as between the applicant and respondent. The intervenors oppose such a course. Oddly, the applicant by amended application of 15 December 2023 concedes that the assets of the Montoya Group be included in the pool as between himself and the respondent. His concession, however, does not extend to a piece of real property at N Street, Suburb O, in Victoria owned by Montoya Pty Ltd and occupied by the applicant’s son, Mr P, and his family. Further, and importantly, the applicant’s concession does not extend to him admitting ownership of the property of the Montoya Group.
In his opening, Mr Bartfeld KC for the applicant stated:
The assets of the entities are to be taken into account when formulating any order. However, we are not seeking to say that our client owns any assets.
I agree with the comments of Mr North SC for the intervenors that the relatively late concession by the applicant is “perplexing”. Prior to 15 December 2023 the applicant had argued for exclusion of the assets of the Montoya Group from the pool whilst consistently denying either ownership or control of the relevant trusts or corporate entities. Nevertheless, a balance sheet in the form of an aide memoir was handed to the Court by the applicant’s counsel including under separate headings “applicant’s assets”; “respondent’s assets”; then Montoya Family Trust/Montoya Australia Trust/Montoya Pty Ltd where he values the net wealth of the “[Montoya Group]” at $36,865,563.
In his evidence in Court and including vigorous cross-examination, the applicant continued to deny ownership or control of the property of the Montoya Group.
Mr P is the applicant’s son. He holds roles as Appointor, Director, Shareholder and Beneficiary in various of the Montoya Group entities. Although not joined personally as a party, Mr P provided an affidavit sworn 9 January 2024. Due to the concession made by the applicant, Mr P’s position was prima facie adverse to that of his father and hence Mr P was open to cross‑examination by Mr Bartfeld KC for the applicant and similarly Mr P was open to cross‑examination by Mr North SC for the intervenors.
THE APPLICATIONS
THE RESPONDENT
Where the parties agree the contents of the property pool and valuations in respect of their personal property and agree the assets and valuations of the corporate entities but where there remains a major dispute as to the status of the, “[Montoya Group]” assets, the respondent seeks orders as follows in broad terms:
(i)that she retain all the property owned by her which has an agreed value of $3,343,724;
(ii)that she retain the property at Town M where she and the children now reside but where title sits with Montoya Pty Ltd such that within seven days of these orders the First Intervenor do all things necessary to transfer the Town M property to the respondent at the expense of the first intervenor inclusive of “livestock, machinery and other assets” and to do so free of all encumbrances including any Capital Gains Tax, Land Tax and any mortgage secured against the property ($3 million plus stock, plant and equipment); and
(iii)the applicant pay the respondent $14,700,000 to be met firstly from the applicant’s interest in Superannuation Fund 1 and the balance from funds held within Montoya Equities Pty Ltd ($14,700,000).
I calculate, therefore, the respondent’s claim to total $21,043,724 plus stock, plant and equipment.
To achieve the fruits of her application the respondent in her Amended Response of 15 January 2024 argues for orders pursuant to s 106B(1) of the Act for the following to be set aside:
(i)the transfer of the applicant’s beneficial interest in the first intervenor from the applicant to the second intervenor on 28 June 2010;
(ii)the Deed of Nominated Appointors for the third intervenor dated 17 August 2013;
(iii)the appointment of Mr P as a Director of the first intervenor on 13 February 2019; and
(iv)the appointment of Mr P as a Director of the second intervenor on 1 August 2019.
It would seem, however, by the time of final written submissions, the respondent retreats from (i) and (ii) above noting that there are only two intervenors.
THE APPLICANT
The applicant’s primary position is that there be no orders altering the parties’ property interests pursuant to s 90SM of the Act with reference to the well-known decision of the High Court in Stanford & Stanford.[1]
[1] (2012) 247 CLR 108; (2012) FLC 93-518.
Alternatively, the applicant argues for what I understand to be a ten percent distribution to the respondent of the combined wealth of the parties personally but including the Montoya Group of companies (presumably should the Court find the applicant to have “ownership or control” of the assets of the Montoya Group) but excluding a property at N Street Suburb O in Victoria with an agreed value $1,950,000 where that property is occupied by Mr P and his family. The applicant calculates an adjustment payment to the respondent of $1,442,031 which would involve the respondent vacating the Town M property in favour of its legal owner, Montoya Pty Ltd.
THE INTERVENORS
Where the intervenors oppose the inclusion of the property of the Montoya Group into the pool for consideration between the applicant and respondent, they seek orders that the respondent’s application for financial relief as against Montoya Pty Ltd and Montoya Equities Pty Ltd as trustee for the Montoya Equities Trust be dismissed.
They seek an order that the applicant vacate and provide vacant possession of the property at Town M.
BACKGROUND
The applicant is 74 years of age been born 1949.
The respondent is 50 years old being born 1974.
The parties have two children namely X born 2009 (aged 14 years) and Y born 2014 (aged 10 years).
Final parenting orders were made by consent on 29 January 2024 providing for the children to live with the respondent and to spend approximately six nights per month with the applicant during school terms. X and Y live with respondent on the property at Town M. X attends Q School and Y attends R School in Suburb T.
There were issues between the parties as to the paternity of X where, in fact, the respondent placed the name of another man, Mr S, on X’s birth certificate as father. X was born in or around the respondent’s relationship with Mr S. It seems that the respondent told each of Mr S and the applicant that he was the father of X. Certainly, the applicant provided financial support for the respondent during her pregnancy. Mr S paid child support initially from X’s birth given that his name was on the birth certificate.
The applicant had DNA testing in July 2011 confirming he was X’s biological father. The respondent then refused the applicant’s request to amend X’s birth certificate and denied time for the applicant with X. The applicant’s evidence is that Mr S had paid some $20,000 to the respondent for child support/support by December 2012. In all of these circumstances it was the applicant who commenced proceedings in these courts by an application initiating proceedings filed 17 January 2012 for parenting orders and hence why he continues as the “applicant” in these financial proceedings. The respondent continued to deny paternity of the applicant and time for him with X.
Formal parenting testing procedure followed and confirmed the applicant as X’s father and interim time-with orders were made. At that stage no property orders were sought.
It seems, however, that the sexual relationship between the applicant and the respondent continued with Y being born 2014.
During the relevant period each of the parties was engaged in a de facto relationship with other persons. Between 2009 and 2013 the applicant was in a de facto relationship with Ms U and living together with her from early 2011. The applicant had previously been married to Ms V from 1985 until 2006. Mr P is the child of that relationship.
On 23 March 2021 the applicant filed an Amended Application seeking a declaration that the parties were never in the de facto relationship. The matter occupied some nine days of hearing time before Johns J as to this jurisdictional issue before culminating in a concession and consent orders declaring that pursuant to s 90RD of the Act a de facto relationship existed between June 2009 and July 2019. The applicant also agreed to contribute $300,000 towards the respondent’s costs.
On 17 October 2013 the applicant reached a financial settlement by financial agreement with Ms U having previously agreed a s 90UC Financial Agreement in May 2011. The respondent says that the terms of these agreements indicate the applicant’s ownership or control of the Montoya Group.
During the course of the de facto relationship between the applicant and respondent between 2015 and 2018 the applicant attempted to negotiate a financial agreement with the respondent where such proposals included benefits from the “Family Trust” or the “[Montoya Group]”. No financial agreement was reached. The respondent says that the applicant’s proposals, however, stated or implied control by him of the Montoya Group.
The applicant describes himself as semi–retired or a part-time Company Director for W Pty Ltd which is best described perhaps as the genesis for the Montoya Group and a business. His disclosed income from employment, Director’s fees/benefits and superannuation is $6,444 per week gross. He holds various offices within the Montoya Group.
The applicant contributes $656 per week child support for X and Y. He pays through the company entities the children’s private school fees totalling approximately $70,000 per annum. He pays rental of $346 per week on the property at Town M occupied by the respondent and the children. Rent is paid to Montoya Pty Ltd so as to avoid Division 7A taxation implications.
The respondent says that she does not work in remunerative employment. She deposes receiving $1,048 in rental from two properties; dividends of $32 per week; and a Family Tax Benefit of $133 per week. She lives without rental obligation on the Town M property and has done so since 2017. Evidence given and adduced in Court discloses some further income for the respondent from various activities. The respondent and the child X also appear to have received substantial financial benefits from a generous benefactor, Mr Z, and his family and particularly in relation to X’s passion for matters sporting including overseas travel.
The circumstances of the relationship between the respondent and Mr Z remain unclear and Mr Z was not called to give evidence to elaborate on the nature of his not insignificant largesse.
THE MONTOYA GROUP
The Genesis of the group stems from 1985 when the applicant and his father set up a Family Trust (the Montoya Family Trust) to hold an investment in the company/business W Pty Ltd. The applicant and his father were the initial appointors of the trust and the initial Directors of the Corporate Trustee.
The applicant in his trial affidavit[2] at [62] deposes:
[2] Filed 15 December 2023.
When I refer to the [Montoya Group] of entities, I refer to the following:
a.[W Pty Ltd] is the main business entity that creates revenue for the group. [W Pty Ltd] is 89.21% owned by [AA Pty Ltd].
b.[AA Pty Ltd]is 76.56% owned by [BB Pty Ltd] as trustee for the [Montoya Family Trust] ([MFT]) as a result of this cascade of ownership, the [MFT] effectively owns 68.3% of [W Pty Ltd]. …
c.[BB Pty Ltd] is Trustee for the [Montoya] Family Trust [MFT].
(d)[Montoya Pty Ltd (MPL)] is a separate entity that owns assets such as the [Town M] property and the property occupied by my son [Mr P] and his wife [Ms KK] and their 3 children in [N Street], [Suburb O], and other assets. All shares in [MPL] are owned by [Montoya Equities Pty Ltd] as Trustee for the [Montoya Equities Trust] ([MET]).
(e)[Montoya Equities Pty Ltd]([M]E) is trustee for the [Montoya Equities Trust] ([MET]) which does not trade and holds no assets except for the shares in [MPL] which it holds on trust for [MET], the shares in [BB Pty Ltd] which it holds on trust for [MFT], and the shares in [Montoya Australia Pty Ltd] which it holds on behalf of the [Montoya Australia Trust].
(f)[Montoya Australia Pty Ltd] as trustee for the [Montoya Australia Trust] ([MAT]) which [CC Financial Services] assessed as being worth $5,460.
At [65]-[72] of his affidavit the applicant elaborates:-
65.…I am a director of a number of companies and receive income from them for managing their assets. These companies and trusts were set up in 1985 [Montoya Family Trust] ([MFT]) and in 1994, [DD Pty Ltd]. In 2007 a new corporate beneficiary [Montoya Pty Ltd] ([MPL]) was established to replace [DD Pty Ltd] whose ownership transferred to my former wife on separation. [Montoya Pty Ltd]is owned by a trust I do not control. All shares in [MPL] are owned by [Montoya Equities Pty Ltd] ([ME]) as Trustee for the [Montoya Equities Trust] (“[MET]”). I do not receive distributions from any of the trusts.
66.I am in a class of beneficiaries along with my children, grandchildren and other beneficiaries and I have an undefined entitlement to distributions from the [Montoya Family Entities] subject to the approval of the trustees.
67.The 3 main entities holding value in the [Montoya Group] of entities are the following with their values assessed by [CC Financial Services] in their report dated 22 August 2023 as follows:
a.[Montoya family Trust] ([MET]) $10,930,185 (which includes the share of [MET] held by [W Pty Ltd]) or ([W Pty Ltd]) through [AA Pty Ltd] which are referred to separately in the above [CC Financial Services] valuation and I repeat my comments regarding need for [CC Financial Services] reassessed evaluation of [W Pty Ltd] above. …
b. [Montoya Pty Ltd] ([MPL]) $30,129,570
c.[Montoya Australia Trust] $5,460
$41,065,400
68.[MPL] was incorporated [in mid] 2007. The directors of [MPL] are my son [Mr P] and me. I was the sole director of [MPL] until February 2019 when [Mr P] also became a Director. The sole shareholder of [MPL] is [Montoya Equities Pty Ltd]([M]) as Trustee for the [Montoya Equities Trust] (“[MET]”).
69.[Montoya Equities Pty Ltd] Directors are me and [Mr P]. The shareholders in [Montoya Equities Pty Ltd] are [Mr P] who was the sole shareholder until February 2019 and then was joined by me since February 2019.
70[MET] beneficiaries are me and my children ([Mr P], [X] and [Y]) and [Mr P’s] children, and [Mr P’s] wife.
71[MPL] is an investment company that seeks to maximise its investments over the longer term. Its investments are a mix of cash, property, and direct and indirect security. Investment decisions and ongoing management decisions regarding all assets in [MPL] including the operation of the [property], have always been made by me as director of behalf of [MPL] shareholders, after consultation between me, [Mr EE] investment adviser, and [Mr P]. Since late 2015 [MPL] have paid a monthly fee for meetings between me and [Mr EE], the investment adviser, to [Mr EE’s] firm, [FF Financial Services].
72[MPL] has never declared a dividend and as such [MET] has never received any income.

Further detail of the structure, historically and currently, of the entities comprising the Montoya Group are summarised with the assistance of the intervenors final submissions as follows:
(i)Montoya Pty Ltd is the first intervenor. It is a proprietary company limited by shares. It was first registered in 2007. The applicant originally owned one issued share which was transferred from the applicant to Montoya Equities Pty Ltd in 2008. The respondent does not seek to disturb that disposition. The applicant has been a Director since 2007 and Mr P has been a Director since February 2019. Pursuant to s 106B(1) the respondent seeks to set aside the February 2019 appointment of Mr P as Director. The Constitution of the company stipulates that neither director has any special power or casting vote and that each may be removed or replaced by the shareholder. The Board decisions are resolved by majority votes. As there are only two Directors their decisions must be unanimous.
(ii)Montoya Equities Pty Ltd was also registered in 2007. The applicant and Mr P each hold two of the four issued shares. Both the applicant and Mr P are Directors. Each has the right to vote and participate at meetings of the Company and neither has any special power or casting vote. Notably the respondent seeks to set aside the 2019 appointment of Mr P as a Director but does not apply to disturb the February 2019 change in shareholdings which saw the applicant, for the first time, hold two shares and hence become an equal shareholder with Mr P. Prior to February 2019, and from March 2009, Mr P had been the sole shareholder and the applicant had been the sole director. Pursuant to the Constitution, therefore, until 2019 Mr P had sole control of the company as sole shareholder. The 2019 transactions see the applicant and Mr P having equal or joint control;
(iii)Montoya Equities Trust was established by a Deed dated mid-2007 with Montoya Equities Pty Ltd as Trustee. The applicant, his children, and remoter issue are identified as the primary beneficiaries. The general beneficiaries are the primary beneficiaries, the parents, spouses, and any other persons cohabiting or living in a bona fide domestic relationship with the primary beneficiary or a person falling within the class of general beneficiaries. Notably clause 4.2.6 of the Deed provides that any corporation is also a beneficiary of the trust where any share is beneficially held by any category of beneficiary and hence Montoya Pty Ltd was a beneficiary of the trust when the applicant held the only share in Montoya Pty Ltd given he was a primary beneficiary under the trust. The Montoya Equities Trust is discretionary both as to income and capital.
The applicant and a Mr GG were appointors under the trust as at the date of its settlement in mid-2007. Where an appointor had power to remove or appoint additional or substitute trustees, no one appointor has such control to do so unilaterally and such decisions must be unanimous.
By Deed of Nomination of Appointors dated August 2013, the applicant and Mr GG ceased to be appointors and were replaced by the applicant and Mr P.
The respondent had sought to set aside the August 2013 Deed of Nomination of Appointors but her final submissions suggest this argument to be abandoned. Notably, however, at no time has the applicant been the sole appointor where effectively Mr P succeeded Mr GG resulting therefore in no period of sole control in the applicant.
Montoya Pty Ltd forms a part of the trust fund as does its assets including the Town M property.
(iv)Montoya Australia Pty Ltd was first registered in mid-2007. There are two issued shares originally held by Mr HH who is the accountant for the Montoya Group and perhaps presently so for the applicant and Mr P. Mr HH provided an affidavit and gave evidence in these proceedings. In early 2009 Mr HH transferred his two shares to Mr P who in turn transferred those two shares in February 2019 to Montoya Equities Pty Ltd but not to be held beneficially pursuant to the Montoya Equities Trust. Both the applicant and Mr P are Directors of Montoya Australia Pty Ltd with Mr P having been appointed in 2014. The Constitution requires a quorum of both directors being present where neither director has a casting vote.
(v)Montoya Australia Trust was established by Deed in mid-2007 with Montoya Australia Pty Ltd appointed as Trustee. The appointors then were the applicant and Mr GG. The beneficiaries were the applicant, his children, and his remoter issue. In mid-2013 a Deed of Nomination of Appointors was executed whereupon the applicant and Mr P are now the appointer for the trust and where the Deed obligates the appointors to act unanimously.
(vi)BB Pty Ltd is a proprietary company limited by shares and was first registered in 1985. The applicant has been a director since 1985 and Mr P has been a director since 2017. There are two ordinary shares each held by Montoya Equities Pty Ltd. The Article 85, of the Articles of Association, provides that questions arising in director’s meetings will be decided by a majority vote with the chairman to have the casting vote in the event of equal votes. The Directors may elect a chairman or appoint one for the holding of a particular meeting. There is no evidence of a chairman having ever been elected. BB Pty Ltd owns 27,618 of the 36,072 issued ordinary shares in AA Pty Ltd. Those shares are recorded as not being beneficially owned. AA Pty Ltd owns 165,295 ordinary shares issued in W Pty Ltd. The shares are recorded as beneficially owned. AA Pty Ltd also owns 15,150 ordinary A class shares in W Pty Ltd. There are 34,850 ordinary A class shares. Those owned by AA Pty Ltd are recorded as beneficially owned.
(vii)By Deed of mid-1985 BB Pty Ltd was appointed trustee of the Montoya Family Trust. It is a discretionary trust as to income and capital. The deed permits the appointor by instrument in writing to remove a trustee and appoint additional trustee(s). The intervenors claim errors and misunderstanding in the recitals to the Deed of Variation of the Montoya Family Trust of early 2019 and the Deed of Nomination and Variation of 2023. Clause 1(i) of the Montoya Family Trust Deed defines “the appointor” as the applicant and Mr JJ (the applicant’s father) jointly with the proviso that each was entitled to nominate a person to act as joint appointor in his place and that “a person appointed to act as Appointor by the Appointor hereby shall have the same right of appointing a person to act as the person who appointed him” and “if more than one person shall be the Appointor hereunder, the powers of the Appointor shall not be exercised without the unanimous consent of all such persons”.
By Deed Poll of Nomination of mid-1994 Mr JJ nominated Mr GG to act as a joint appointor. By Deed Poll of Nomination of early 2009 Mr GG nominated Mr P as joint appointor and hence joining the applicant as joint appointor of the Montoya Family Trust.
The asserted error stems from there being no record of Mr JJ resigning as appointor in mid-1994 despite his nomination of Mr GG and similarly there is no record of Mr GG resigning as appointor or upon his nomination of Mr P as appointor in early 2009.
The error, argued by the intervenors, stems from clause 1(1) of the Trust Deed which only empowers an appointor to nominate a “replacement” but does not permit additional nominated appointors leaving the applicant and Mr P as joint appointors with an obligation to act unanimously with a result that the applicant has never been a sole appointor of the trust and hence has never had sole control of the trust so as to justify any argument that the property of the trust is the property of the applicant.
Relevantly a Deed of Nomination and Variation dated early 2023 to which each BB Pty Ltd, the applicant, Mr P and Mr HH are recited as appointors cannot therefore be valid.
ISSUE AND RELEVANCE OF THE “MONTOYA GROUP”
The process of consideration of alteration of the property interests of the primary parties under the Act at s 90SM(1) requires the Court to first establish the legal and equitable interests of the parties in property. This requirement here ignites broad areas of legal and factual dispute including and permeated by questions as to the credit of the primary parties, their witnesses, and of Mr P.
Broadly speaking, the respondent argues that the assets of the Montoya Group should form part of the property pool where she says the applicant has engaged in behaviour to reduce the property pool and improperly quarantine the assets of the Montoya Group from the property pool thereby denying her rights under s 90SM of the Act. She says that the applicant has:
(i)historically had effective use and control of all of the assets of the Montoya Group;
(ii)has commonly and with impunity represented to the respondent and others that he was in sole control of, or had a “majority control”, of the assets of the Montoya Group;
(iii)executed s 90UD and 90J Financial Agreements with his former de facto partner, Ms U, in 2011 and 2013 representing and treating Montoya Group assets as his own;
(iv)attempted to negotiate financial agreements with the respondent similarly representing ownership and/or “control” of the Montoya Group assets;
(v)been the “puppet master” of Mr P who is a “puppet director” only and beholden to the sole control of the applicant;
(vi)arranged a meeting with his and the Montoya Group accountant, Mr HH, and the applicant’s family law solicitor but absent Mr P, in February 2019 with a sole or primary agenda of company restructure so as to protect and avoid any claim by the respondent against the assets of the Montoya Group;
(vii)conceded that the property of the Montoya Group be “taken into account” and included in the property pool as between the primary parties albeit continuing to deny ownership or control; and
(viii)accordingly, the respondent argues that transactions in the form of instruments or dispositions be set aside pursuant to s106B(1) of the Act where she says such were made to defeat anticipated orders in these proceedings or were likely to defeat such orders.
The applicant says that an historical examination of the Montoya Group will show that the applicant has never had ownership or sole control of the Montoya Group assets by reason of the structure of directors’ and appointors’ powers have always been joint or subject to the removal by shareholders which provides generally, and historically, checks and balances against absolute control or ownership. He says that no sinister motives should be read into the meeting in February 2019 where the agenda points to nothing more than a general review of the structure noting also an agenda item as to the position of the Trusts as against Mr P’s wife. The applicant denies either intention or factual control of Mr P and says that they operate equally within the Montoya Group albeit with separate functions consistent with practice, experience, and expertise.
Mr P provides an affidavit[3] for the intervenors. As mentioned above, his position is prima facie adverse to that of the applicant by reason of Mr P arguing that the assets of the Montoya Group should not be included in the property. Mr P is not himself a party to these proceedings. In his affidavit he gives a summary of the structure of the group consistent with the above. At [11] he deposes:
Since [mid] 2015, I have resided at [N Street, Suburb O] with my wife [Ms KK] and our children. This property is owned by [Montoya Pty Ltd]. We pay the company rent for this accommodation which is currently $4983 per month. I do not consider that the [N Street, Suburb O] property belongs to me, it is an asset owned by [Montoya Pty Ltd] and we pay the company a commercial rent to live there. Prior to the company’s acquisition of the [Suburb O] property, I consulted with the Applicant after advising him of my desire to rent property which would also provide a residential investment for the family entities. The applicant I sourced a number of potential properties to acquire on behalf of the company and we bid on two properties prior to successfully bidding upon the [Suburb O] property. The applicant and I saw [Suburb O] as an appropriate investment vehicle, it was located in a quiet area, close to a railway line and close to shopping centres. Further, it represented a reasonable renovation opportunity and we agreed that it had appropriate capital gain potential. Further, the company funded renovations to the property in the sum of approximately $700,000. Accordingly, like the [Town M] property, the [Suburb O] property represented a potentially sound business acquisition, which also benefited the beneficiaries of the trust in providing some security of tenure through occupation and the payment of rent.
[3] Filed 9 January 2024.
Mr P further deposes in his affidavit:
18.My contributions to the operation of the entities and to the investment decisions have broadened and deepened over time as I have gained further experience through my career in commerce and finance. My involvement in the operations of the businesses and contributions to investment decisions involve attending investment meetings with the group’s financial advisor, [FF Financial Services] and having input into investment decisions relating to share purchases or sales and asset allocation relating to [MPL], [MFT], and [Superannuation Fund 1]. I would regularly participate in annual review meetings with the group’s accountant [Mr HH] to discuss financial end of year accounts, annual distributions and taxation implications. I exercise my own independent judgement in arriving at my decision.
19.I view [MPL] and the broader family trust structure as critical to growing and preserving a wealth for future generations within the family. As a corporate entity, [MPL] is designed to maximise return on investment, reduce taxation liabilities and protect against relationship breakdown relating to shareholders.
…
21.Since 2007, I have had the following involvement in the operation of the [Montoya] family entities, after acquiring and enhancing my experience and attaining various milestones in the commercial and financial sector;
I.[In early] 2008, I became a director of [BB Pty Ltd], as trustee of [Montoya Family Trust] ([MFT]).
II.In 2009 I became sole shareholder of all trustee companies for all trusts and [in] 2009 I became sole shareholder of [Montoya Equities Pty Ltd].
III.In 2011 I completed my [degree] at [TT University].
IV.In 2013 I commenced employment [in communications] with [UU Company].
V.[In mid] 2013 I became an appointor of [Montoya Equities Trust]. [Later that year], [Montoya Equities Pty Ltd] also became a shareholder of [MFT];
VI.In [mid] 2015 I commenced employment by [LL Financial Services] as a [Manager].
VII.[In late] 2015 I ceased as a director of [BB Pty Ltd] due to restrictions from a new employment at [LL Financial Services].
VIII.[In early] 2017 I resumed as a director of [BB Pty Ltd] after taking the role at [SS Financial Services].
IX.[In early] 2017 I became non-executive director of [W Pty Ltd], I subsequently attended quarterly board meetings and participated in and contributed to discussions determining investment strategy strategies.
X.In 2018 I enrolled in [VV University] undertaking a [work related] course and attend the course in [early] 2019
XI.[In] 2019 I became a director of [MPL]. I had previously been sole shareholder of [ME] (the corporate trustee of [Montoya Equities Trust]) which is the sole shareholder of [MPL]. The applicant became a shareholder of [ME]. The changes reflected my increasingly active involvement in investment decisions however I also shared shareholder rights with the Applicant from that date onwards.
XII.[In] 2019 I became a director of [ME] (corporate trustee for [Montoya Equities Trust]). I had previously been the sole shareholder with the Applicant becoming a shareholder in [early] 2019.
XIII.In [mid] 2022, I commenced my employment with [MM Company] as [Manager]
In taking on my respective role, I have undertaken my role in protecting the assets of [Montoya] entities for the needs of future generations of [Montoya’s] (sic).
…
[32]In response to paragraph 65 [of the respondent’s affidavit] the family trust structure and associated entities were set up well before the Respondent met the Applicant. The only material changes in the structure occurred after the Applicant separated from my mother, [Ms V], in 2007. I confirm that the Applicant does not control [MPL]. [MPL] is owned by [Montoya Equities Pty Ltd] of which the directors and shareholders are myself and the Applicant. [Montoya Entities Pty Ltd] is the trustee of [Montoya Equities Trust], of which the appointors are the Applicant, [Mr GG] (sic), [Mr HH] and myself.
RELEVANT LEGAL PRINCIPLES
The Court is required by s 90SM(1) to identify and value the legal and equitable interest of parties ‘property’.
Section 4 of the Act relevantly defines property in respect of the parties to a de facto relationship as “property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion”.
Where beneficial ownership and/or control might be indicators or species of “property”[4]the observation of Gibbs J in Ascot Investments Pty Ltd v Harper[5] were as follows:
The position is, I think, different if the alleged rights, powers or privileges of the third party are only a sham and have been brought into being, in appearance rather than reality, as a device to assist one party to evade his or her obligations under the Act. Sham transactions may always be disregarded. Similarly, if a company is completely controlled by one party to a marriage, so that in reality an order against the company is an order against the party, the fact that in form the order appears to affect the rights of the company may not necessarily invalidate it.
Except in the case of shams, and companies that are mere puppets of a party to the marriage, the Family Court must take the property of a party to the marriage as it finds it. The Family Court cannot ignore the interests of third parties in the property, nor the existence of conditions or covenants that limit the rights of the party who owns it. …
[4] Kennon v Spry (2008) 238 CLR 366; [2008] HCA 56.
[5] (1981) 148 CLR 337 at 354; [1981] HCA 1 (“Ascot Investments”).
In this matter where I understand the force of the respondent’s argument to be that the applicant is in control of the property of the Montoya Group such that Mr P is his “puppet” then the comments of Barwick CJ in Ascot Investments are relevant:[6]
…The husband might be ordered to take such steps as he could lawfully take to secure the registration of the transfer. But the court could have no authority to compel the husband to do something which he could not do or compel others to do.…
In my opinion, the appellant and its directors could not be ordered to do something in relation to the shareholding which the husband by dint of his shareholding could not compel the appellant or its directors to do.
[6] Ascot Investments at 343 and 344.
The Chief Justice then explained at 343 to 344:
… I have said earlier that the husband’s shareholding did not place him in control of the company. By that I mean to say that not only could his vote in a general meeting of the company not determine the result of a motion before that meeting: I mean also to indicate that the husband was not shown to be able to treat the company as his own, an alter ego. Although he was managing director, it does not follow that he could exercise the powers of that office for his own personal purposes. The word “control” is in this connexion may be ambiguous. The control which is significant here would be the ability to treat the company and its affairs as his own. Control he might exercise in the interests of the company and all its shareholders would be irrelevant. If the Full Court thought there was material on which he could be said to be in control of the company in the relevant sense, their Honours were, in my opinion, in error.

On the same theme, Gibbs J in Ascot Investments[7] continued thus:
… It can safely be assumed that the Parliament intended that the powers of the Family Court should be wide enough to prevent either of the parties to a marriage from evading his or her obligations to the other party, but it does not follow that the Parliament intended that the legitimate interests of third parties should be subordinated to the interests of a party to a marriage, or that the Family Court should be able to make orders that would operate to the detriment of third parties. There is nothing in the words of the sections that suggests that the Family Court is intended to have power to defeat or prejudice the rights, or nullify the powers, of third parties, or to require them to perform duties which they were not previously liable to perform. …
…
It is one thing to order a party to a marriage to do whatever is within his power to comply with an order of the court, even if what he does may have some effect on the position of third parties, but it is quite another to order third parties to do what they are not legally bound to do. If the sections had been intended to prejudice the interests of third parties in this way, it would have been necessary to consider their constitutional validity.
[7] Ascot Investments at 354.
In Public Trustees v Smith[8] White J sitting in the Supreme Court of New South Wales commented:
125.It is perfectly understandable in the context of s 79 the expression “property of the parties to a marriage or either of them” should be read as extending not only to the property owned by a party to the marriage but also property controlled by a party to the marriage where the control is such as to put the party in the same position as if he or she were the owner of the property. That is how I understand the family law cases to have proceeded. In Marriage of Ashton and In Marriage Davidson (No.2) the Court spoke of “de facto ownership”. Ownership is a legal concept. The expression “de facto ownership” appears to describe something which is not legal or equitable ownership but a power which is to be treated as the equivalent of ownership. It involves no stretching of the concept of property to construe the expression “property of a party” as extending to property which a party owns or which the party controls as if he or she were the owner. It comes down to what the word “of” in the phrase denotes - whether it means ownership only, or whether it includes control as effective as ownership. This is the context in which the family law cases must be read. In my view, they do not support the wider proposition that as a matter of general law an object of a discretionary trust can be described as the beneficial owner of the property held by the trustee, merely by virtue of his or her being a discretionary object and also controlling the trustee.[9]
[8] [2008] NSWSC 397.
[9] In the Marriage of Ashton (1986) 11 Fam LR 457; In the Marriage of Davidson (No. 2) (1990) 101 FLR 373.
It seems, therefore, that, in a proper understanding of the construction of the corporate structures, should the power of the appointor be capable as being exercised as an instrument of control and ultimately for the benefit of the appointor then the property of the trust might be regarded as being as effectively owned by the appointer. Crucially there seem to be elements of first, control and, secondly, the achievement of benefit.
The Full Court in Harris & Dewell and Anor[10] intricately reviewed earlier authorities and observed:
67.It should be accepted that the principles emerging from the High Court and from the decisions of this Court to which reference has been made permit of a finding that property ostensibly that of a trust can be treated as property of a party for s 79 purposes where evidence establishes that the person or entity in whom the trust deed vests effective control is the “puppet” or “creature” of that party. The metaphor is used to connote a situation where the person or entity with control (the “puppet”) does nothing without the party (the “puppet master”) controlling or directing that person or entity.
68.Control is not sufficient of itself. What is required is control over a person or entity who, by reason of the powers contained in the trust deed can obtain, or effect the obtaining of, a beneficial interest in the property of the trust. In our respectful view, it is in that sense, that Finn J speaks of “some lawful right to benefit from the assets of the trust”.
[10] (2018) FLC 93-839; [2018] FamCAFC 94.
In Stephens & Stephens and Ors[11] Finn J writing separately in the Full Court noted the dual necessity for control and ability to benefit where her Honour stated:
137.In my opinion, control of the Trust was not sufficient. As was submitted by senior counsel for the husband in all of the earlier authorities on which his Honour relied (being principally, Ashton (supra) and Davidson (supra)), the spouse who had control of the trust also had some capacity to benefit (if only through a corporate entity) from the assets of the Trust. In the present case, if the 1983 Deed remained in place, which was the basis on which Strickland J expressly proceeded, the husband had no beneficial right or interest. He only had control, and I accept that no earlier authority in this court has gone so far as to hold that control alone without some lawful right to benefit from the assets of the trust, is sufficient to permit the assets of the trust to be treated as property of the party who has that control. (See Ashton; Stein (1986) FLC 91-779; Davidson; Goodwin (supra); Webster (supra); JEL & DFF (supra); and Milankov (supra). See also the discussion in Kelly (No. 2) (supra)).
[11] (2007) FLC 93-336; [207] FamCA 680.
Consequently, where I do not understand the respondent to argue the corporate structure to be a sham, the Court is called upon to make findings of fact as to whether the applicant has control of the trusts such that they are effectively his alter ego and that he has the lawful right to benefit from the assets of the trusts and therefore whether he is the “puppet master” of the “puppet”, Mr P and, if so, whether certain instruments or dispositions made in favour of Mr P be set aside pursuant to s 106B of the Act.
These are assertions made by the respondent and hence she carries an onus to give or adduce evidence to prove those facts or assertions where the standard of proof is one of on the balance of probabilities.[12]
[12] The Evidence Act 1995 (Clth) s140.
CONSIDERATION
The respondent says the applicant initiated a meeting of early 2019 evidenced by email communications with Mr HH, the accountant. She says the agenda references “asset protection from [the respondent]”. The applicant’s family law solicitor, Mr NN, was in attendance. The parties separated in July 2019 and it is open to infer that the relationship was “in trouble” as of February of that year. Mr P was not present at that meeting.
In early 2019 Mr P was appointed as a Director of Montoya Pty Ltd and two new shares were created in Montoya Equities Pty Ltd to be held by the applicant. Deeds of Variation were signed by the applicant in respect of Montoya Family Trust and Montoya Equities Trust.
The respondent also relies on financial agreements executed by the applicant with his former de facto partner, Ms U, dated 3 May 2011 and 17 October 2013 (termination agreement). As representations made by the applicant of control in the Montoya Group Assets and importantly where Mr P gives evidence that he was not consulted as to the terms of those agreements.
Recital J to the s 90UC Financial Agreement of May 2011 states:
[The applicant] was born […] 1949 and is 65 years old. [The applicant] holds a number of board appointments and receive distributions and dividends from entities in which he has a controlling interest of between $1 million and $2 million per annum.
Schedule B of that document lists as the applicant’s separate property “interest in [W Pty Ltd] $16,985,000”.
In cross-examination the applicant conceded that he did not consult with other officeholders of the Montoya Group when entering into the Financial Agreement with Ms U.
Similarly, the respondent relies on approaches made by the applicant to her during their de facto relationship so as to enter financial agreements and representations by him, directly and impliedly, of ownership/control of the trust’s assets. An email from the applicant to the respondent of December 2015[13] suggests, upon separation, an income of $180,000 per annum to the respondent from “family trust” and “No right to family trust assets ([MFT], [MAT], [MPL]) only income and asset growth. If I die 50% of asset growth goes to you”.
[13] Exhibit R5.
The respondent says that these are statements by the applicant consistent with ownership, control and the right to benefits from the Family Trust assets.
Similarly, Mr P gives evidence that he was not aware of these negotiations and/or representations made by the applicant.
Around the time of the purchase of the Town M property[14] the respondent points to further representations by the applicant in an email from him to her of 8 December 2016 including the following:
Property to be purchased by [Montoya Pty Ltd]. On my death property to be left to [respondent] if we are still together. If our relationship breaks down irretrievably at [the applicant’s] option property to be sold and 50% of increase in the value to go to [respondent] as part of any settlement. …
[14] Exhibit R6.
Further negotiations[15] towards a financial agreement continued until 2018 where emails disclose notes of such negotiations including references to the respondent receiving franked distributions from the Family Trust escalated each year by CPT and, in the event of separation, “50% of asset growth of [MPL] (not including distributions from [MFT] but including increase in the value of [the property]) goes to you”.
[15] Exhibit R7.
The respondent says that the context of the above representations by the applicant argue towards ownership/control of the trust assets by the applicant and demonstrated yet again in an email from him to her of 31 October 2018 in respect of negotiations to buy a Melbourne property as follows:
As I have said many times, the only way I can afford to buy is if Family money is used and you/we rent off the family company.
…
1.[MPL] bracket [Montoya Pty Ltd] ([MPL]) purchases premises for you and the children to live in, reasonably close to schools in [Suburb T]…
2.        You are the tenant and pay rent on the property at market rates…
You cannot continue to reside at (the property) but if can come to some arrangement for joint use such as below…
1.        We will continue to run this property as an investment together;
2.        You will act as [property] manager…
…
4.Intention is to keep property as a long term investment…
5.We will share in any increase in capital value of the property 50/50. …
The respondent says that the trust is the alter ego of the applicant in that nowhere in the above negotiations does he put any condition of such proposals such as that he first obtain the consent of joint appointors, directors, and/or shareholders of the Montoya Group.
It follows, therefore, that the respondent argues the above history of control of the Montoya Group was to be addressed at the meeting of 4 February 2019 with the purpose of excluding any claim against the Montoya Group assets by the respondent where the meeting was instigated by the applicant for that purpose rather than, as suggested by he and Mr HH, for general review of structures and for a variety of agenda. The respondent says that to the intention and motive is evident by the presence of the applicant’s family law solicitor in the absence of Mr P. The evidence of Mr P is that he was informed of the changes in shareholdings and directorships within the Montoya Group only after the meeting of 4 February 2019.
Where the parties separated in July 2019, the respondent says that the steps of restructure at the 4 February 2019 meeting effectively gave 100 per cent legal control of the trust assets to the applicant from February 2019 until August 2019 when the directorship of Mr P was actually enacted but where the applicant became a 50 per cent shareholder in Montoya Equities Pty Ltd from the date of the meeting of 4 February 2019 whilst remaining the sole director. The respondent says that this demonstrates Mr P to be a mere “puppet” director acting always at the behest of his father.
Mr HH gave evidence that his contact/instructions came almost exclusively from the applicant and even after 2019 when Mr P became a director of Montoya Pty Ltd. Mr HH agreed that his involvement with Mr P had been minimal and he had not met him until post 2018 with his evidence being that his contact directly with Mr P had been in relation to personal tax affairs.
The respondent further argues that the applicant in consenting and conceding to the assets of the Montoya Group being “taken into account when formulating any order” in these proceedings as a further representation by the applicant of ownership and control and importantly where Mr P now gives evidence that he was not consulted on this change of position taken by the applicant and, in fact, was unaware of the applicant’s position until after December 2023 when the applicant filed his amended application.
Given her argument as to control/ownership/ability to benefit from the trusts, the respondent seeks orders pursuant to s 106B of the Act to set aside the appointment of Mr P as Director of Montoya Equities Pty Ltd made August 2019 as it had the intended effect of defeating her anticipated property settlement orders in respect of a property pool which would include the assets of the Montoya Group. The respondent says that where the applicant took steps only in August 2019 and after the parties separated in July 2019 to enact the appointment of Mr P as a Director of Montoya Pty Ltd thereby removing the applicant from legal control of the Montoya Group, such conduct was done with the purpose of obstructing, defeating or minimising the respondent’s claim for property settlement in attempting to move the group’s assets from the reach of the Court.
The respondent relies on a number of documents now in evidence as exhibits including:
(i)the Financial Agreements of 2011 and 2013 made between the applicant and Ms U;
(ii)Exhibit R9 being the email chain between Mr HH and the applicant making clear that it was the applicant who instigated the meeting of 4 February 2019 rather than Mr HH as previously indicated in the applicant’s evidence;
(iii)Exhibit R22 being a document headed “filed-Fam Court structures 19XLS being an attachment to the applicant’s email to Mr HH of 1 February 2019 with a sub-heading “[The applicant]-Asset Protection Structure 2007” and against the reference to Montoya Pty Ltd stating inter alia “not accessible by Family Court”.
(iv)Exhibit R11 being an email chain between the applicant and Mr HH dated 29 and 30 July 2021 headed “Rebuttal: [the respondent’s] affidavit” the contents of which respondent says is the applicant suggesting the content of Mr HH’s affidavit to mask “[the respondent’s] claim that I was meeting with my accountant (on 4 February 2019) to minimise any property settlement that would be due…” Similarly Exhibit 13 being a further email between the applicant Mr HH of 30 July 2021 regarding the preparations of the applicant’s affidavit which includes inter alia “I have avoided any explanation for why [Mr P] became a sole shareholder in 2009. We could say estate planning purposes??” and
(v)Exhibit R14 which is an email from Mr HH to the applicant and Mr P of 7 June 2022 which says:
Good Morning [the applicant]
Thought I might send attached for a refresh in advance of next week’s court appearances.
I am catching up virtually with [Mr P] to review.
It will of course (sic) helpful if we are singing from the same hymn sheet generally.
A strong global overview will of course provide something to fall back on for detailed questions.
(vi)Exhibit R25 being a series of an annual letters from Mr HH to the applicant where the applicant provides instructions as to management and taxation affairs of the Montoya Group and states “I will leave you to contact [Mr P] and Ms KK for details of their tax returns”;
(vii)Exhibit R26 being a bundle of file notes from Mr HH dated 16 November 2016 to 15 June 2023 which, according to the respondent, demonstrate the applicant making major decisions regarding the management of the Montoya Group which is at times referred to as “[the applicant] [Montoya Group]”; and
(viii)Exhibit 11 being two minutes of meetings of directors for 30 June 2022 and 22 June 2023 were Mr P was noted as chairperson but where the applicant gave evidence that he sign the minutes himself.
The respondent says that the above facts cumulatively show the applicant to be in control of the Montoya Group such as the group is his “alter ego” and that the applicant has a capacity to act independently of Mr P and unilaterally including making representations to Ms U and the respondent herself as to being able to distribute or allocate the benefits of the trusts.
THE APPLICANT’S CASE
The applicant maintains his position (in his amended application of 23 December 2023) and where in opening Mr Bartfeld KC stated:
Your Honour, our position is very clear, and has been made clear from the day that an amended application was filed. That was sent on 15 December 2023, makes clear that the assets of the trusts, the intervenors, can be and should be taken into account. We don’t say we own them, but they should be taken into account, and that’s how we put the case.
With respect to Mr Bartfeld KC, that statement is anything but clear. It falls short of an admission of control and/or ability to direct the benefit of the trust assets. It is unclear as to whether it is an admission of the Montoya Group Property being treated as a financial resource of the applicant.
The applicant’s final submissions do not otherwise address the respondent’s argument of control/effective ownership by the applicant of the Montoya Group assets. Nor do they address her argument as to the trusts being the alter ego of the applicant in the sense of Mr P being simply a “puppet director” and the applicant being the “puppet master”.
The applicant’s counsel does submit, however, consistent with his alternative argument of no adjustment to the respondent or minimal adjustment, that there should be no need to activate s 106B of the Act in respect of the two relevant transactions impugned by the appointments of Mr P as Director of the first and second intervenor’s in that the applicant holds sufficient wealth personally so as to be able to leave any adjustment to the respondent.
The applicant’s counsel, Mr Bartfeld KC, did not cross-examine Mr P who, of course, was the witness supporting the position of the first and second intervenors but where prima facie there are adverse interests between them as to the status of the Montoya Group of assets with how such assets be treated for the purposes of the Act.
THE INTERVENORS
The intervenors concede that the fact of control by a party to a marriage or de facto relationship of a corporation or a trust as central to a determination of whether the assets of the corporation or held subject to the trust may properly be regarded as property of a primary party or parties.
Relying on Harris & Dewell and Anor (supra), however, the intervenors emphasise the distinction between the third party having an existence and means of control separate from the relevant party where the extent of control necessary “before assets in a company or trust can properly be treated as assets of a party to a relationship’ is such that the third party is nothing but a party to the marriage in another guise”. Further, in borrowing from Barwick CJ in Ascot Investments (supra), the intervenors emphasise the distinction between legitimate and independent third-party entities from control by a party which gives “the ability to treat the company assets and its affairs as his own”. The intervenors recognise that control exercised in the interest of the company and all of its shareholders is to be distinguished from control which enables the party to achieve the benefits of the assets as his own thereby treating the company or trust as an alter ego and having the level of control to do so.

The intervenors position and submissions rely heavily on the decision of the Full Court in Harris & Dewell and Anor (supra) and citing Finn J in Stephens & Stephens and Ors (supra) that the long line of authority dealing with this complex issue has not gone so far as to hold the control alone without some lawful right to benefit from the assets of the trust be sufficient to permit a Court to treat the assets of the trust as property of the party who has control.
The Full Court in Harris Harris & Dewell and Anor (supra) continued:
It should be accepted that the principles emerging from the High Court and from the decisions of this Court to which reference has been made permit a finding that property ostensibly that of a trust can be treated as property of a party for s 79 purposes where evidence establishes that the person or entity in whom the trust deed vests effective control is the “puppet” or “creature” of that party. The metaphor is used to connote a situation where the person or entity with control (the “puppet”) does nothing without the party (the “puppet master”) controlling or directing that person or entity.
Put simply, the intervenors say that the evidence before this Court and the historical structures of the Montoya Group do not show in the applicant the dual requirements of control and lawful right to direct income or property of the corporation or trust or, more particularly, that the respondent has not proven that factual solution on the balance of probabilities.
The status of the relevant officeholders, shareholders, beneficiaries are established by the Deed or Articles and as observed by Lemming J in Lewis v Condon:[16]
…A trust once validly constituted does not change in nature because the trustee and some of the beneficiaries subsequently choose no longer to abide by the obligations of the trust relationship. …
[16] [2013] 85 NSWLR 99 at [81].
It follows, in my view, that the Court must view holistically the history of the structure of the corporate entities/trusts and the documents which established them are not simply the personalities or perceptions of individuals where a more forceful personality within the structure does not equate to control or ownership and similarly a tendency towards acquiescence does not make a director a “puppet”.
Where the respondent relies to some extent on the representations made by the applicant in Financial Agreements with Ms U in 2011 and 2013 and representations to the respondent herself towards a financial agreement, closer scrutiny is required of such representations. Firstly, it is clear that the representations/proposals made by the applicant to the respondent were never enshrined in a Financial Agreement. At their highest, they are proposals within negotiations and it is entirely plausible that such negotiations would and could not be concluded until the applicant had sought and obtained the agreement of Mr P. The evidence is that Mr P did not enjoy a good relationship with the respondent and it is entirely plausible, therefore, the applicant should enter into the negotiations with the respondent without first alerting Mr P to his proposals.
Similarly, whilst of the recitals to the Financial Agreements with Ms U in 2011 and 2013 unambiguously reference the applicant’s interests in the Montoya Group as the applicant’s “separate property”, the terms of the agreement do not propose the transfer or disposition of any Montoya Group assets to Ms U. Rather, the terms of the contract make it clear that each of the parties to the Financial Agreement intend that they keep their finances separate and each retain his and her assets as at the commencement of the relationship. Further, and significantly, the s 90J Termination Agreement between the applicant and Ms U of 17 October 2013 does not include any transfer or disposition of Montoya Group Property to Ms U and rather a relatively modest cash adjustment from the applicant himself to Ms U without reference to the Montoya Group. The recitals, therefore, go no more than to a subjective perception and certainly do not state having received the consent of co-directors and do not contemplate doing so.
It follows, in my view, therefore, that neither the Financial Agreements with Ms U nor the representations made by the applicant to the respondent themselves allow me to find on the balance of probabilities that the applicant was exerting control or ownership of the property of the Montoya Trust. Rather, his own subjective perception of his level of control is irrelevant when seen against the requirements of the Deeds or Articles. The fact that the consent of Mr P was not sought or obtained in the early stages of the negotiations between the applicant and the respondent is the therefore chronologically irrelevant.
The respondent relies on the Court interpreting the meeting of 4 February 2021 between the applicant, Mr HH, and the applicant’s family law solicitor, and absent Mr P as evidence of control and of the unilateral ability of the applicant to divert benefits from the Montoya Group to himself. Essentially, she challenges the credit of the evidence of the applicant, Mr HH and Mr P. She relies heavily on an agenda item being “asset protection from [the respondent]”. However, the agenda was much broader. It also dealt with the wife of Mr P. More broadly the applicant says that the agenda was to address any perceived power in Mr P himself should he turn “rogue” and hence to broaden the powerbase within the group with the intention of the applicant and Mr P having equal shared control through directorships, powers of appointment, and shareholding. Consequently, and importantly, the effect of the meeting 4 February 2019 was in effect to enlarge the power or control of the applicant rather than to diminish it, as suggested by the respondent, and when arguably the structure existing until then, and for many years, had placed disproportionate power and control in Mr P. The evidence of the applicant and Mr HH together with exhibits was consistent as to the breadth and purposes of the agenda. Further, it is clear that the entities for some considerable time had structure in place to preserve the property of the corporate entities/trusts.
Mr P gave evidence that the structured changes contemplated at the meeting were raised with him contemporaneously with the meeting and agreed by him. Importantly those changes saw Mr P become a Director of both intervening companies.
Mr P provided an affidavit sworn 9 January 2020. It deposes to being a Company Director by occupation. It imposes roles variously as Director, Appointor and shareholder of the various Montoya Group Entities since 2007. It deposed to education and experience commensurate with his roles within the Montoya Group with a leaning to investment strategies. His evidence was of actual involvement and participation.
I found Mr P in cross-examination to be a responsive and honest witness. He acknowledged his level of control in the Montoya Group between 2009 and 2019 and that the applicant had wanted to address this inequity of control at the February 2019 meeting.
Mr P candidly agreed that his father had not consulted him on the proposal in emails from the applicant to the respondent suggesting a financial agreement and disposition from the Montoya Group to the respondent. He did, however, say that there were discussions with his father as to the purchase of the properties including the Town M property and says that he has visited the property on five to 10 occasions but leaves the management of the property to his father and others on the understanding that the respondent acts as property manager. Mr P repeated that he understood the property to be an investment consistent with the strategies of Montoya Pty Ltd.
Mr P gave evidence plausibly that his role and activity with the Montoya Group increased upon him gaining experience. He said that his role was towards investment and that his father was more involved in accounting and hence the applicant having greater direct dealings with Mr HH. I generally accept the evidence of Mr P.
Mr P also gave evidence that his appointment as a Director of Montoya Equities Pty Ltd flagged from the 4 February 2019 meeting but not effected until August 2019 was an oversight on the part of Mr HH. In any event, this “oversight” had effectively left the applicant in control of Montoya Group through transfer of shareholdings to him without the contemporaneous and contemplated appointment of Mr P as Director. In my view, this “oversight” does not to help the respondent who argues forcibly that the meeting of February 2019 was arranged primarily so as to restructure the Montoya Group, and particularly the level of control of the applicant, so as to distance both the applicant and herself from trust assets. The oversight, in fact, for a short period actually increased the control of the applicant. Further, the claim by the respondent that the primary agenda of the meeting was to protect the property of the Montoya Group from the Family Court and hence the applicant, does not sit comfortably with the historical structure of the Montoya Group which was set up so that no one person could exercise control and/or direct benefits from the trusts to himself without the consent of another director. Again, and notably, it was Mr P, rather than the applicant, who may be seen to have held greater control in the entities prior to the meeting of 4 February 2019.
Mr P in his affidavit specifically references the circumstances of the purchase of the Town M property in 2017 where the respondent relied on this purchase and representations attributed to the applicant as evidence of the applicant’s control or actual ownership of the Montoya Pty Ltd as his alter ego. Mr P deposes to conversations in 2016 with the applicant as to the purchase of a property generally for the purposes of investment and use by family members. He deposes to consultations with Mr HH as to taxation implications and alternative structures. His affidavit asserts consultation and joint decision-making. This evidence shows both the actual and active role of Mr P in investment decision making and that the Town M purchase was made as an investment, consistent with strategy, rather than as a personal purchase by the applicant.
The respondent also questions the credit of the applicant’s evidence in Court and particularly as to his relative demeanour in responses in cross-examination from Mr Geddes KC for the respondent as against the leading questions and the short affirmations in response to cross‑examination from Mr North SC for the intervenors.
I agree that the applicant’s responses in cross-examination from Mr Geddes KC were often vague and at times unresponsive whereas his responses to Mr North SC were concise, direct and responsive to similarly concise leading questions. Indeed, on interruption from the bench on one occasion following an affirmative response to a question from Mr North SC, it became clear that the applicant had given affirmative response without actual knowledge. As such, I find some merit in the respondent’s submission as to the bona fides of the applicant’s responses where, of course, Mr North SC was able to put such concise leading questions and cross-examine the applicant only because of the prima facie adverse positions of the applicant and the intervenors in respect of the inclusions of Montoya Group assets in the property pool for consideration. Nevertheless, even if I find that the applicant’s evidence was simply and blandly to agree with every proposition put by way of leading question from Mr North SC, this adds little to the respondent’s argument save and except that in reality the positions of the applicant and the intervenors may not be as “adverse” as claimed. I am alive also, of course, to the fact that any “concession” made by the applicant as to inclusion of assets of the Montoya group into the property pool is not accompanied by a similar concession as to “ownership or control”. Consequently, I am left with a feeling that the rationale of cross-examination by Mr North SC was for the purposes of emphasis rather than challenge but again gives little assistance to the respondent other than to perhaps suggest that the applicant himself does not have such intricate understanding of the complex structures of the Montoya Group as might be expected of someone with the level of control and ownership suggested by the respondent.
Consequently, and where the respondent holds an onus to prove the assertions she makes, I am unable to find on the balance of probabilities that she has made out her case that the Montoya Group is in reality the alter ego of the applicant in that Mr P is no more than his “puppet” and leaving control of the Montoya Group solely with the applicant and where he has the legal entitlement to derive benefit from the Montoya Group to himself. I find that the structure of the Montoya Group historically has always required unanimous decision-making where the various Deeds position appointors, directors and shareholders are such that unilateral control is not available. I find the various representations attributed to the applicant in financial agreements with Ms U and towards a financial agreement with the respondent are no more than subjective proposals and, in the first case not activated so as to require any decision-making as to diversion of Montoya Group assets and, in the second, constituting nothing further than proposals which were not accepted and hence no requirement required for agreement of Mr P or other officeholders.
I find that the substance and effect of the meeting of 4 February 2019 was not primarily to divest or decrease control of the entity in the applicant but perhaps conversely to remove some control from Mr P where I find that Mr P has historically been active in the management of the Montoya Group affairs.
Therefore, where I not find that the assets of the Montoya Group could be regarded as the property of the applicant, there can be no argument in the making of orders under s 106B setting aside the Instruments of Appointment in respect of the Mr P
It follows, therefore, in respect of the s 90SM application that the assets of the Montoya Group will not be included in the property pool for consideration as between the applicant and respondent.
THE RELEVANT LAW – SECTION 90SM
The respondent seeks orders under s 90SM of the Act for an adjustment of the interests of the parties and property.
After establishing the property pool, which is now settled, and not now including the property of the Montoya Group, the Court must decide pursuant to s 90SM(3) whether, in all the circumstances of the case, it is just and equitable to make any order altering the property interests of the parties.
The primary position of the applicant is that, in the circumstances of this case, no such order should be made.
Section 90SM(1) of the Act gives the Court a broad discretion where the section provides:
In property settlement proceedings after the breakdown of a de facto relationship, the court may make such order as it considers appropriate ... altering the interests of the parties to the de facto relationship in the property …
Nevertheless, that broad discretion may be exercised only within its statutory parameters. In R v Watson: Ex parte Armstrong[17] the High Court observed:
… The judge called upon to decide proceedings of that kind is not entitled to do what has been described as “palm tree justice”. No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down…
[17] (1976) 136 CLR 248 at 257.
Whereas trial judges might previously have been understood to follow a strict four–step approach in determining the interests of the parties in property and altering those interests,[18] the High Court in Stanford & Stanford (supra) returned emphasis to a discrete consideration in the Court as to s 90SM(3) being that the Court must 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. Only after that determination does the Court move to consider the contributions of the parties at s 90SM(4) to the acquisition, conservation, or improvement of any of the properties of the parties or either of them. Those contributions may be of a direct or indirect financial type or, alternatively, contributions may be of a non-financial type including as home maker and parent. The Court then turns to consider whether there be any further adjustment to either of the parties on consideration of the matters at s 90SM(4)(d)-(g) including any relevant factors at s 90SF(3) of the Act. The notion of justice and equity is to permeate the entire process of consideration.
[18] Hickey & Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143;
The High Court in Stanford & Stanford (supra) emphasised that the consideration at s 90SM(3) must be an independent one based on the circumstances of each case and importantly not to be simply conflated with the consideration of contributions and other factors at s 79(4). The Court assisted trial judges by setting out three fundamental propositions that should not be obscured:
37.First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to “altering the interests of the parties to the marriage in the property” (emphasis added). The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
38.Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. …
…
40.Third, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
(Original emphasis) (Footnotes omitted).
There has been considerable judicial debate subsequent to Stanford & Stanford (supra) as to whether or not the considerations at s 90SM(4) can be taken into account in answering the question at s 90SM(3) and notably by Full Courts in Bevan & Bevan[19] and Chapman & Chapman[20] where, after consideration, of relevant authorities I take the view that the contributions may be considered in the s 90SM(3) question but are not mandatory in that consideration. It follows that the four step approach from Hickey & Hickey (supra) remains a convenient course for consideration by trial judges although perhaps not so rigid in its application as previously thought.
[19] (2023) FLC 93-545; [2013] FamCAFC 116.
[20] (2014) FLC 93-592; [2014] FamCAFC 91.
Again, where the Court is required to make findings of fact, it does so on a standard of proof of on the balance of probabilities consistent with s 140 of the Evidence Act 1995 (Cth). Matters of credit between the primary parties are again to the fore where each challenge is the credit of the other.

The applicant gave evidence and responses in cross-examination in a manner consistent with his affidavit. I did not glean the applicant to embellish, exaggerate or be selective in his evidence as to the nature of his relationship with the respondent. He was responsive and consistent in cross-examination, and I found him to be generally an honest and genuine witness together with being an accurate historian of the relationship albeit vague in some responses to cross-examination by Mr Geddes KC for the respondent and simply acquiescent to questions from Mr North SC for the intervenors.
The respondent was not a good witness. In his final submissions Mr Geddes KC, for the respondent conceded that the contents of the affidavits filed previously in these proceedings by her were factually inaccurate with concessions as those untruths in her materials made only by the respondent in cross-examination in this trial. Her admissions could only be interpreted as to deliberate untruths to the extent that caused me to consider referring the respondent for consideration of charges of perjury. I do not generally accept the matters put in mitigation on her behalf and consider the respondent to be capable of deliberate untruths in her evidence as convenient to her case as indeed was further exposed by significant omissions and in her affidavits and financial statements. I am comfortably able to find on the balance of probabilities that the respondent actively concealed her financial circumstances from the Court where she has undisclosed income, financial resources and/or benefactors and where such evidence was extracted only in cross-examination. She personally redacted parts of bank statements. She neglected to give details of rental and other income. She deposes to an excess of expenditure over income of some $600 per week yet she was able to travel with the Y to Europe in late 2023. She was evasive or vague in her evidence as to bank account transactions between herself and X. Her sworn financial statement is silent as to largesse in the form of international travel and purchases of animals for X in 2023. She claimed outstanding debts to these benefactors but without evidence of loan documents, repayment, or requests of repayment. Her evidence was uncorroborated by her failure to call her benefactors to give evidence leaving open inferences that the honest evidence of those persons would not have assisted the respondent.[21]
[21] Jones v Dunkel (1959) 191 CLR 298; [1959] HCA 8.
Specifically, and without going into detail, the position taken by the respondent in respect of the paternity of X as between the applicant and Mr S give this Court further concerns and suspicions as to her honesty and financial motivations.
Accordingly, where their remains factual dispute between the applicant and respondent and not otherwise corroboration then I generally prefer the evidence of the applicant although I am mindful of, and accept, the submission of counsel for the respondent citing the recent decision of Lee J in Lehrmann v Network Ten Pty Ltd[22] where his Honour noted in respect of assessing credit:
136.Moreover, in assessing whether one has reached a stated reasonable satisfaction in making a finding of fact, it is jejune to proceed on the basis that rejecting part of an account of a witness of an event must mean one must reject all aspects of the account of the witness.
(Original emphasis)
137.Consistently with ordinary human experience, some witnesses may misremember or lie about some things but tell the truth about others. Despite my concerns about the truthfulness of both Mr Lehrmann and Ms Higgins, it would be simplistic to proceed on the basis this means I must reject everything they say. As the Full Court (McKerracher, Robertson and Lee JJ) explained in CCL Secure Pty Ltd v Berry [2019] FCAFC 81 (at [94]):
It has been a long time since the maxim falsus in uno, falsus in omnibus (false in one thing, false in everything) was part of the common law, its broad applicability having been rejected long ago (including by no less a judge than Lord Ellenborough CJ in R v Teal (1809) 11 East 307; 103 ER 1022). It is trite that the tribunal of fact (be it a judge or jury), having seen and heard the witness, is to decide whether the evidence of the witness is worthy of acceptance and this may involve accepting or rejecting the whole of the evidence, or accepting some of the evidence and rejecting the rest: Cubillo v Commonwealth [2000] FCA 1084; (2000) 103 FCR 1 at 45-47 [118]-[123]; Flint v Lowe (1995) 22 MVR 1; and S v M (1984) 36 SASR 316. It is for this reason a jury is directed that they may accept some parts of a witness’s evidence, but not other parts: Dublin, Wicklow & Wexford Railway Co v Slattery (1878) 3 App Cas 1155. This reflects the accumulated wisdom and experience of the common law that witnesses may lie about some things and yet tell the truth about others, and the tribunal hearing the evidence is best placed to fix upon the truth. …
[22] [2024] FCA 369.
Given the statements of principle set out above and reference to various authorities, I understand the applicant’s position being that it is not just and equitable to make any orders altering the property interests of the parties on the basis broadly of the circumstances of their relationship but also in respect of the appropriate weight given to the various contributions.
For context, I repeat the fundamental circumstances of the relationship being:
(i)there being a declaration pursuant to s 90RD of the Act that the parties were in the de facto relationship between June 2009 and July 2019;
(ii)there being two children of the relationship namely X (aged 14 years) and Y (aged 10 years) where the children live primarily with the respondent and spend some time, pursuant to orders, with the applicant;
(iii)the applicant pays child support for the children in the quantum of $2,842 per month being above the assessment. He pays rent of $1,500 per month on the Town M property payable to Montoya Pty Ltd and so as to avoid Division 7A taxation liabilities;
(iv)the Montoya Group Family Trust has agreed to meet the private school fees for the children in a sum of about $70,000 per annum;
(v)the respondent and the two children have resided at the Town M property since 2017 and more recently by interim sole occupation orders;
(vi)the applicant is 74 years of age and describes himself as a semi-retired part time company director with a total gross income of $6,444 per week or net $5,345 per week. The respondent is 50 years of age and describes herself as “ordinarily engaged in parenting and home duties on a full-time basis”. She discloses rental income of $1,048 per week from two properties at Suburb J and Suburb G supplemented by $32 a week from dividends and $133 per week from Family Tax Benefit.
There is no evidence that either of the parties have currently re partnered in any dependent or supportive relationship.
Cross-examination disclosed the respondent also receiving additional rent of $895 per week from February 2024 from one of her two townhouses at Suburb D. She did not update the Court of this information in evidence–in–chief but again that evidence was extracted in cross‑examination.
Similarly, and only from cross-examination, I am able to find on the balance of probabilities that the respondent has other sources of income or financial resource/largesse not disclosed in her evidence in affidavit or in chief.
Given my findings in respect to the property of the Montoya Group, the property pool as between the applicant and respondent is now settled as to content and value and as follows:

Assets and liabilities Ownership Value

OO Street, Suburb E Applicant $6,300,000

Suburb E property mortgage Applicant ($2,500,000)

Motor Vehicle 3 Applicant $10,000

Savings Applicant $1,500

Superannuation Applicant $2,768,958

Applicant’s net assets $6,580,458

F Street, Suburb G Respondent $660,000

1 C & 2 C Street, Suburb D Respondent $1,625,000

H Street, Suburb J Respondent $975,000

Suburb J property mortgage Respondent ($172,058)

PP shares Respondent $51,485

K Finance Shares Respondent $40,787

Animal transport Respondent $12,000

Motor Vehicle 1 Respondent $1,500

ATO Debt Respondent ($37,080)

Debt to QQ Organisation Respondent ($39,400)

Superannuation Respondent $226,490

Respondent’s net assets $3,343,724

TOTAL NET ASSETS OF THE PARTIES $9,924,182

In the hands of the parties, therefore, I calculate the property pool to be distributed as to ownership and possession from a total pool value of $9,924,182 as to 66.3 per cent to the applicant and 33.7 per cent to the respondent.
The respondent in her trial affidavit[23] [44] deposes:
When [the applicant] and I started our relationship, I had the following real estate assets:
(a)       The property at [H Street, Suburb J];
(b)      The property at [F Street, Suburb G]; and
(c)       The property at [C Street, Suburb D].
[23] Filed 15 January 2024.
Notably the respondent does not claim to have then owned any other property of value. She does not attribute value to these real properties as of 2009. Those three pieces of real estate remain in the property pool and in the hands of the respondent. Neither the applicant nor the respondent claim any contributions by the applicant to those three pieces of real property. Where I generally accept the evidence of the applicant when in conflict with that of the respondent, I accept his unchallenged evidence that he was oblivious to the extent of the respondent’s real estate ownership until she filed a first financial statement in 2019.
At around the time of commencement of the relationship with the respondent the applicant purchased the property at OO Street, Suburb E from his former wife for $2,950,000 funded fully by a mortgage loan from the Montoya Family Trust. The applicant’s other “property” of value was his superannuation entitlements. The applicant’s evidence is that he has repayments on the mortgage to BB Pty Ltd of $1,923 per week.
Where the evidence of the respondent might imply or suggest that the parties resided together, I prefer the evidence of the applicant that they did not live together save and except for nine days after a fire at the respondent’s home.
I accept the applicant’s evidence that the parties kept their finances separate.
There was no joint bank account. There was no joint self-managed superannuation fund. There were no joint loans. They did not purchase property together.
I do accept, however, that there was some joint decision-making and involvement in the purchase of the Town M property. The applicant acknowledges the respondent’s contribution in searching and locating the property for purchase. The purchase was funded by Montoya Pty Ltd. There is no evidence of financial contribution by the respondent to the purchase or later improvements. Again, I prefer the evidence of the applicant over that of the respondent where there be any conflicts.
The respondent has enjoyed sole occupation of the Town M property for the past five years pursuant to interim sole occupation orders made the August and 20 October 2019 and overall for seven years given I accept the applicant’s evidence that the parties did not cohabit.
There is now evidence that the respondent derives income from her occupation of the property by various uses. Her material filed with the Court did not voluntarily disclose these sources of income.
The applicant pays the required rental for the property to Montoya Pty Ltd so as to avoid Division 7A tax consequences but has no use or occupation of the property.
Where the respondent claims non-financial contributions to the Montoya Group/W Pty Ltd, I prefer the evidence of Ms RR who has been and continues to be Chief Executive Officer of W Pty Ltd for the past 12 years. She gave an affidavit of 13 December 2023. She gave evidence and was cross-examined. I observed Ms RR to be an informed, honest and responsive witness. At [6] of her affidavit she deposes:
At no time was I ever aware of [the respondent] being involved in the operation of [W Pty Ltd] or any business associated with [W Pty Ltd] or of her being involved in any decision making in respect of [W Pty Ltd].
At [9] Ms RR deposes that the respondent did not host any event for W Pty Ltd. Ms RR disputes the particulars of a number of claimed attendances and contributions of the respondent as being factually incorrect.
Where there is dispute between Ms RR and the respondent, I prefer the evidence of Ms RR.
The children, X and Y, have always lived in the primary care of the respondent and this must be given weight as a significant contribution by her. The applicant, however, contributes child support over and above the assessed amount. Private School fees are met through the Montoya Group. The applicant pays the rent on the Town M property where the respondent and the children have lived for the past five years.
The applicant contributed to the respondent’s support during her pregnancy with X. Whilst this might seem reasonable given the applicant was eventually shown to be X’s biological father, the evidence suggests that the respondent also received financial support from Mr S who had also been informed that he was the father and in fact paid assessed child support formally and voluntarily for a period through the Child Support Agency in 2009. To put it mildly, the respondent’s evidence in cross-examination as to her bona fides in respect of X’s parentage was unsatisfactory at best. Where the respondent’s affidavit material is silent as to this “contribution” by the applicant and evidence exposed the respondent as having been untruthful in her 2012 affidavit filed with this Court and where she now concedes fundamentally lying to this Court on the first day of her evidence.
The applicant is 74 years of age. He enjoys a comfortable income from his part time director’s duties. His health has been compromised by a recent medical diagnosis.
The respondent is 50 years of age. She is independently wealthy as evidenced by the balance sheet above which now returns her a rental income greater than that disclosed by her to the Court prior to cross-examination.
I accept the submissions that the evidence of the respondent herself from affidavits and extracted in cross-examination allows me to find on the balance of probabilities that her wealth has significantly improved in value and income throughout the continuance of her relationship with the applicant from 2009.
I further find that the respondent has a source of financial resource in a generous benefactor or the benefactor’s family who were not called to give evidence but whose largesse over the past two years seems to have extended to at least some $150,000 including for international travel for X and for the acquisition of animals. Again there was a notable lack of disclosure of this “resource” both at this trial and in a relatively recent Interlocutory Application before me by the respondent seeking litigation funding and other lump sums.
The respondent says that she has not been employed in meaningful paid employment since 2005 but where she previously had an income of $100,000 per annum as a manager. She is just 50 years of age. She presented in the witness box in many ways as a resourceful and capable woman and again where only in cross-examination were other sources of income for the respondent exposed.
Whilst the respondent will continue as the children’s primary carer, the strongest likelihood is that the applicant will continue, directly and through the Montoya Group, to provide generous financial support and private school fees for the children. In this sense, the “financial resource” that the applicant clearly enjoys through the Montoya Group, significantly also benefits the respondent whom I assume prefers the children to continue in their private school education.
Parliament in enacting a s 90SM(1) of the Act has conferred a broad discretion on trial courts limited only by the statute itself and the permeating notion of justice and equity. As the High Court said in Stanford & Stanford (supra) at [36]:
The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.
For clarity, and in considering whether it be just and equitable to make any orders altering the property interests of the parties as they currently sit and consistent with the Full Court in Bevan & Bevan (supra), I do consider the contributions of the parties. Firstly, there are obvious contributions as home maker and parent where there are now two children of this relationship aged 14 and 10 years. Further, the relationship itself endured some 10 years. I do so however, within the context that each of these parties has effectively retained the property that each brought in to the relationship and where I find on the evidence that there has been no contributions by either, or no contributions of substance, to the property of each by the other. Circumstantially, they did not to live together. They did not mix their finances. They did not borrow jointly. They did not purchase jointly. Each has significant independent wealth commensurate with their financial positions as of the commencement of the de facto relationship in 2009.
The respondent has made significant contributions by reason of being primary carer of the children and continuing so after the demise of the relationship in 2019. Nevertheless, there are direct and indirect contributions by the applicant towards the children. He has paid generous child support over and above that assessed. In addition, he has paid rental of $1,500 per month to allow the respondent and the children sole occupation of the property, rent or mortgage free, for a period of some seven years. This has allowed to the children, and particularly X, to pursue her sporting interests. It has, on the evidence that I now know, permitted the respondent to achieve some income from her use of the property. Still further, the applicant’s “resource” in the form of the Montoya Group has met the children’s school fees in the sum of approximately $70,000 per annum. These are not insignificant contributions by or on behalf of the applicant.
Pursuant to s 90SM(4)(d)-(g) and s 90SF(3) I should look at the circumstances of the parties as to whether there should be any further adjustment after consideration of contributions and the circumstances of the relationship.
The applicant is 74 years of age. He has suffered a recent medical diagnosis. I accept that his role within the Montoya Group is now part time as a director. He does not enjoy good health and it is proper to assume that his work life is limited. I do accept, however, that he enjoys the financial resource of the Montoya Group but again as most prominently manifested in the payment of school fees for his children.
The respondent is just 50 years of age. Although she has not worked remuneratively in a formal sense since 2005, she previously had the capacity to earn an income of approximately $100,000 per annum in 2005. I am satisfied on the evidence that she derives income from various sources but accept that this is reliant upon her occupation of the property. She does, however, own properties which will continue to bring her significant rental income. At 50 years of age she at least has the potential for employment for some years hence. She will continue to derive a benefit by way of the Montoya Group’s commitment to the payment of the children’s school fees. In all of those circumstances, I would not consider any further adjustment.

Where the orders leave the assets of each of the parties currently in their hands and I calculate a division of the net property therefore at 66.3 per cent to the applicant and 33.7 per cent to the respondent in accordance with the balance sheet set out herein then in the particular circumstances of this relationship, and particularly given the implicit assumptions of the parties and the nature of their financial relationship, it is my view that justice and equity is served by not altering the property interests of the parties as they currently sit in each of their hands.
The findings that I have made will require orders that the respondent vacate the Town M property. I note, however, that the respondent holds the title to a number of other properties and, within a reasonable timeframe, will be able to accommodate herself and the children adequately. I consider that ninety days for the respondent to vacate the Town M property would be sufficient time for her to make alternative arrangements.

I certify that the preceding one hundred and fifty (150) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices McGuire.
Associate:
Dated: 13 August 2024

File number:	MLC 323 of 2012
Judgment of:	MCGUIRE J
Date of judgment:	13 August 2024
Catchwords:	FAMILY LAW – PROPRTY SETTLEMENT – Where parties were in a de facto relationship for 10 years – where parties own assets jointly, severally and through corporate entities and trusts – where applicant seeks a division of property – where there are two children of the relationship – order that there be no orders altering the property interests of the primary parties – order that the respondent vacate the property which she resides in - declaration that the assets held by the Entities are not the property of the applicant and respondent – declaration that assets of the Entities are the property of the Entities
Legislation:	Evidence Act 1995 (Cth) s 140 Family Law Act 1975 (Cth) SS 90SM, 90SM(1), (3), (4)(d)‑(g)
Cases cited:	Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337 at 354; [1981] HCA 1 Bevan & Bevan (2023) FLC 93-545; [2013] FamCAFC 116 Chapman & Chapman (2014) FLC 93-592; [2014] FamCAFC 91 Harris & Dewell and Anor (2018) FLC 93-839; [2018] FamCAFC 94 Hickey & Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 Jones v Dunkel (1959) 191 CLR 298; [1959] HCA 8 Lehrmann v Network Ten Pty Ltd [2024] FCA 369. Lewis v Condon [2013] NSWLR 99 Public Trustee v Smith [2008] NSWSC 397 R v Watson: Ex parte Armstrong (1976) 136 CLR 248 Stanford & Stanford (2012) 247 CLR 108; (2012) FLC 93-518 Stephens & Stephens and Ors (2007) FLC 93-336; [2007] FamCA 680
Division:	Division 1 First Instance
Number of paragraphs:	150
Date of last submissions:	21 June 2024
Date of hearing:	29, 30 and 31 January 2024 and 2, 23 and 24 February 2024
Place:	Melbourne
Counsel for the Applicant:	Mr Bartfeld KC and Ms Mariole
Solicitor for the Applicant:	Collins Law Pty Ltd
Counsel for the Respondent:	Mr Geddes KC
Solicitor for the Respondent:	Sage Family Lawyers
Counsel for the Intervenor:	Mr North SC and Mr Salamanca
Solicitor for the Intervenor:	Carew Counsel Solicitors

MLC 323 of 2012
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:	MR MONTOYA Applicant
AND:	MS ROSALES Respondent
MONTOYA PTY LTD & MONTOYA EQUITIES PTY LTD AS TRUSTEE FOR THE MONTOYA EQUITIES TRUST Intervener

ORDER MADE BY:	MCGUIRE J
DATE OF ORDER:	13 AUGUST 2024

Assets and liabilities	Ownership	Value
OO Street, Suburb E	Applicant	$6,300,000
Suburb E property mortgage	Applicant	($2,500,000)
Motor Vehicle 3	Applicant	$10,000
Savings	Applicant	$1,500
Superannuation	Applicant	$2,768,958
Applicant’s net assets		$6,580,458
F Street, Suburb G	Respondent	$660,000
1 C & 2 C Street, Suburb D	Respondent	$1,625,000
H Street, Suburb J	Respondent	$975,000
Suburb J property mortgage	Respondent	($172,058)
PP shares	Respondent	$51,485
K Finance Shares	Respondent	$40,787
Animal transport	Respondent	$12,000
Motor Vehicle 1	Respondent	$1,500
ATO Debt	Respondent	($37,080)
Debt to QQ Organisation	Respondent	($39,400)
Superannuation	Respondent	$226,490
Respondent’s net assets		$3,343,724
TOTAL NET ASSETS OF THE PARTIES		$9,924,182