Morrison and Hunter

[2016] FamCA 212

FAMILY COURT OF AUSTRALIA

MORRISON & HUNTER [2016] FamCA 212

FAMILY LAW – PROPERTY – Whether consent orders should be set aside pursuant to s79A Family Law Act 1975 (Cth) – Whether orders to substitute consent orders pursuant to s79 should be made – Where there are minimal net assets – Where the applicant has received 25 per cent of the property pool – Where the respondent has assumed financial burden in caring for children.

Family Law Act 1975 (Cth) ss 4, 79, 79A

Baghti & Baghti and Ors [2015] FamCAFC 71
Bevan & Bevan (2013) FLC 93-545
Stanfordv Stanford (2012) FLC 93-518

APPLICANT: Ms Morrison

RESPONDENT: Mr Hunter

FILE NUMBER: TVC 13 of 2010

DATE DELIVERED: 7 April 2016

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Carew J

HEARING DATE: 29, 30, 31 March 2016

REPRESENTATION

THE APPLICANT: Self Represented

THE APPLICANT: Self Represented

Orders

1. By consent and pursuant to s79A(1A) the order made by consent on 12 August 2009 be set aside.

2. The Application for a final order filed on 22 December 2010 (as amended) is dismissed.

3. All extant applications are otherwise dismissed and removed from the list of cases awaiting finalisation.

4. Following the expiration of the appeal period all subpoenaed documents be returned to the person or institution from which they emanated and all exhibits be returned to the person or persons who tendered same. 

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

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: TVC 13 of 2010

Ms Morrison

Applicant

And

Mr Hunter

Respondent

REASONS FOR JUDGMENT

1. The parties to this dispute are Ms Morrison (“the applicant”) and Mr Hunter (“the respondent”).

2. By Application for final orders filed 22 December 2010 (as amended) the applicant sought an order inter alia to set aside the order made by consent on 12 August 2009 pursuant to s79A of the Family Law Act and for an order in substitution pursuant to s79.

3. At the commencement of the final hearing of that Application the parties consented to the setting aside of the 2009 order pursuant to s79A(1A).

4. The applicant sought the following order in substitution:

   a)That within 30 days of the date of this Order the respondent pay to the applicant the sum of $128,599.00 being the total monies the respondent claimed to have distributed to the applicant in the Statement of Distribution to the Australian Taxation Office for the Hunter Family Trust] for 2008, plus interest at the rate prescribed by the Family Court of Australia.

   b)That within 30 days of the date of this Order the respondent pay to the applicant the sum of $128,502.18, being the Unpaid Present Entitlement listed as owing to the applicant on the Hunter Family Trust Financial Statements for the financial year 2008-2009, plus interest at the rate prescribed by the Family Court of Australia.

   c)That within 30 days of the date of this Order the respondent pay to the applicant the sum of $61,362.01, being 50 per cent of the case balance of $122,724.02 for the “Offset” (being the account at Westpac account No. …) as at 30 June 2009 and not declared by the respondent at marital property settlement, plus interest at the rate prescribed by the Family Court of Australia.

   d)That the respondent pay the applicant’s tax liabilities in the sum of $38,740.63 plus all interest and charges applied by the Australian Taxation Office.

   e)That the respondent pay to the applicant outstanding monies owed to Centrelink with respect to overpayment of Family Tax Benefit funds in the sum of $45,567.85.

   f)That the respondent pay to the applicant the sum of $91,200 being 50 per cent of the lease expenses on his business premises that he incorrectly listed as a liability on the Application for Consent Orders filed 31 July 2009.

   g)Notwithstanding the Centrelink and Taxation items that the respondent pay interest on the above amounts in accordance with rule 17.04 of the Family Law Rules.

5. The respondent sought the following order:

   a)That the applicant’s Further Amended Application (as further amended by leave on 29 March 2016) be dismissed.  

Brief Background

1. The parties were married and commenced cohabitation in 1990 and separated on 11 November 2008. They divorced on 1 March 2010.

2. The applicant was born in 1971 and the respondent was born in 1970.

3. They have four daughters, namely, D born in 1993, Y born in 1996, T born in 1999 and F born in 2001. The children have remained in the full time care of the respondent since separation. The children were aged 15, 12, 9 and 7 respectively at the date of separation. The children were attending a private Christian College at the time of separation and continued their education at that school subsequent to separation.

4. The applicant has spent limited time with the children since separation and moved from the Sunshine Coast (where the family lived during the marriage) to North Queensland, over 1,200 kilometres away, in August 2010.

5. The applicant re-partnered with a Mr J in or about 2009.

6. The respondent remarried in 2011 and his wife, Ms Hunter (nee K) has two children of her own.

7. On 12 August 2009 a final order was made in relation to parenting and property by consent.

8. On 22 December 2010 the applicant sought to set aside the property order. It is unclear why the application has taken so long to come on for final hearing but there have been a number of interim hearings along the way in relation to financial and other matters.

Material relied upon

1. The material relied upon by the applicant was as follows:

   a)Further Amended Application filed 6 November 2014 (as further amended by leave on 29 March 2016);

   b)Affidavit of the applicant filed 13 January 2015;

   c)Affidavit of Ms L filed 13 January 2015;

   d)Affidavit of the applicant filed 30 March 2015; and

   e)Financial Statement filed 28 March 2016.

2. Only the applicant was required for cross-examination in her case. The applicant also tendered various documents, which became exhibits in the proceedings.

3. The material relied upon by the respondent was as follows:

   a)Further Amended Respondent filed 13 March 2015 (as further amended by leave on 29 March 2016);

   b)Affidavits of the respondent filed 20 March 2015;

   c)Affidavit of Ms M filed 20 March 2015;

   d)Affidavit of Mr N filed 20 March 2015;

   e)Financial Statement filed 24 March 2016;

   f)Affidavit of the respondent filed 24 March 2016; and

   g)Outline of Case filed 21 March 2016.

4. Only the respondent was required for cross-examination in his case. The respondent also tendered various documents, which became exhibits in the proceedings.

Findings sought by the parties

1. The applicant sought the following findings said to be in support of the order sought by her:

   a)The respondent has not fully disclosed his property;

   b)Some of his liabilities should be ignored for the purposes of working out what property adjustment should be made;

   c)The respondent has undisclosed cash from which a payment can be made as sought by her;

   d)The value of the assets at the time of the 2009 consent order was greater than set out in the Application for Consent orders and as a result she received less than she should have.

2. The respondent sought the following findings said to be in support of the order sought by him:

   a)There is no net property;

   b)These proceedings are vexatious and a fishing expedition;

   c)The applicant has been dishonest in her disclosure.

3. It is not every factual dispute that requires a determination but only those that are actually necessary to a determination of the proceedings.[1]

   [1] Baghti & Baghti and Ors [2015] FamCAFC 71.

Relevant statutory provisions

1. Section 4 of the Family Law Act 1975 (Cth) (“the Act”) defines property as meaning:

   In relation to the parties to a marriage of either of them – means property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.

2. Section 79 of the Act relevantly provides:

   (1)In property settlement proceedings, the court may make such order as it considers appropriate:

   (a)in the case of proceedings with respect to the property of the parties to the marriage or either of them – altering the interests of the parties to the marriage in the property;

   (b)…

   including:

   (c)an order for a settlement of property in substitution for any interest in the property; and

   (d)an order requiring:

   i)Either or both of the parties to the marriage; or

   ii)         …

   to make, for the benefit of either or both of the parties to the marriage … such settlement or transfer of property as the court determines.

   …

   (2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

   (4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:

   (a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage … to the acquisition, conservation or improvement of any of the property of the parties to the marriage of either of them, or otherwise in relation to the last mentioned property, whether or not that last mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage of either of them; and

   (b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage … to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage of either of them; and

   (c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and

   (d)the effect of any proposed order upon the earning capacity of either party to the marriage; and

   (e)the matters referred to in subsection 75(2) so far as they are relevant; and

   (f)… and

   (g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.

Relevant legal principles

1. The High Court has often stressed that the discretion exercised pursuant to s79 is extraordinarily wide.[2] That said it must be exercised in accordance with legal principle.[3]

   [2] De Winter & De Winter (1979) FLC 90-605; Norbis v Norbis (1986) FLC 91-712; Stanfordv Stanford (2012) FLC 93-518.

   [3] Ibid.

2. The starting point is to consider whether it is just and equitable to make an order at all, by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. Secondly, in exercising the discretion conferred by s79 it should be borne in mind that there is no presumption that the parties’ rights to or interests in property are or should be different from those that currently exist. Thirdly, the consideration of whether it is just and equitable to make an order should not be considered by reference only to the matters in s79(4).[4]

   [4] Stanford (supra); Bevan & Bevan (2013) FLC 93-545.

3. The Full Court in Bevan observed that while the High Court did not disapprove of the ‘four step process’ neither did it approve of it. The Full Court noted:

   71. Stanford will also serve as a reminder that the four step process “merely illuminates the path to the ultimate result”. Any future restatement of that process should incorporate acceptance of the fact that the power to make any order adjusting property interests is conditioned upon the court finding that it is just and equitable to make an order.

Is it just and equitable to make an order?

1. The parties have been apart for eight years. They own no joint property. The terms of the 2009 consent order, while now set aside by consent, have been carried out.

2. The parties were able to agree in large part as to their respective existing interests in property as per the balance sheet set out below:[5]

   [5] Exhibit 26.

Applicant’s property	Applicant’s value	Respondent’s value
O Street, Suburb P	$160,000.00	$160,000.00
Westpac ..	$3.00	$3.00
Q Pty Ltd	$61,316.00	$61,316.00
Motor vehicle 1	$2,000.00	$2,000.00
Household contents	$5,000.00	$5,000.00
Edit on line	$-	$-
All Court Up	$-	$-
R Pty Ltd	$-	$-
Morrison.com	$-	$-
S Pty Ltd	$-	$-
Y Pty Ltd	$-	$-
GROSS PROPERTY	$228,319.00	$228,319.00
Applicant’s liabilities
ANZ mortgage O Street	$(153,662.00)	$(153,662.00)
ATO estimated debt	$(38,741.00)	$(30,844.00)
Family Tax Benefit debt	$(45,568.00)	$(36,602.63)
Ms J (Mr. J’s mother)	$(22,500.00)	$(22,500.00)
TOTAL LIABILITIES	$(260,471.00)	$(243,608.63)
Net property ex superannuation	$(32,152.00)	$(15,289.63)
Superannuation	$15,505.00	$15,505.00
Net property including superannuation	$(16,647.00)	$215.37

Respondent's property	Applicant’s value	Respondent’s value
U Street, V Town	$850,000.00	$425,000.00
W Street, X Town	$895,000.00	$447,500.00
NAB	$6,190.00	$6,190.00
Westpac	$-	$-
Motor vehicle 2 (net value)	$-	$-
Motor vehicle 3 (net value)	$-	$-
Business G	$-	$-
T Pty Ltd	$-	$-
GROSS PROPERTY	$1,751,190.00	$878,690.00
LIABILITIES
NAB mortgage U Street St	$(688,565.00)	$(688,565.00)
NAB mortgage W Street	$(818,773.00)	$(818,773.00)
ATO assessed debt	$(155,530.00)	$(155,530.00)
Amex	$(25,464.00)	$(25,464.00)
Visa	$(36,000.00)	$(36,000.00)
Education fees and braces	$(19,500.00)	$(19,500.00)
TOTAL LIABILITIES	$(1,743,832.00)	$(1,743,832.00)
Net property ex superannuation	$7,358.00	$(865,142.00)
Superannuation
IOOF	$79,846.58	$79,846.58
Respondent’s net property including superannuation	$87,204.58	$(785,295.42)

1. The explanation for the differences in the balance sheet are as follows:

   a)The respondent’s real properties are registered in his sole name but he contends that his current wife has a half interest in those properties. The respondent claims that he is solely liable for the debt on those properties. The applicant contends that as they are registered solely in the name of the respondent they should be treated as his sole property. As I have no evidence before me of any contribution to those properties having been made by the respondent’s current wife I have treated the properties as being the sole property of the respondent for the purposes of this hearing.

   b)The evidence before me as to the applicant’s estimated tax debt[6] and Family Tax Benefit debt[7] accords with the figures identified by the respondent in the table above.

   [6] Exhibit 15.

   [7] Exhibit 16.

2. Accordingly, I find the existing interests of the parties in property is as follows:

Applicant's property	Value
O Street, Suburb P	$160,000.00
Westpac …	$3.00
Q Pty Ltd	$61,316.00
Motor vehicle	$2,000.00
household contents	$5,000.00
Edit on line	$-
All Court Up	$-
R Pty Ltd	$-
Morrison.com	$-
S Pty Ltd	$-
Y Pty Ltd	$-
GROSS PROPERTY	$228,319.00
Applicant’s liabilities
ANZ mortgage O Street	$(153,662.00)
ATO estimated debt	$(30,844.00)
Family Tax Benefit debt	$(36,602.63)
Ms J (Mr. J's mother)	$(22,500.00)
TOTAL LIABILITIES	$(243,608.63)
Net property ex superannuation	$(15,289.63)
Superannuation	$15,505.00
Applicant’s Net property including superannuation	$215.37

Respondent's property
U Street, V Town	$850,000.00
W Street, X Town	$895,000.00
NAB	$6,190.00
Westpac	$-
Motor vehicle 2 (net value)	$-
Motor vehicle 3 (net value)	$-
G Pty Ltd	$-
T Pty Ltd	$-
GROSS PROPERTY	$1,751,190.00
LIABILITIES
NAB mortgage U Street St	$(688,565.00)
NAB mortgage W Street	$(818,773.00)
ATO assessed debt	$(155,530.00)
Amex	$(25,464.00)
Visa	$(36,000.00)
education fees and braces	$(19,500.00)
TOTAL LIABILITIES	$(1,743,832.00)
Net Property ex superannuation	$7,358.00
Superannuation
IOOF	$79,846.58
Respondent’s Net property including superannuation	$87,204.58

1. As is immediately apparent, the applicant has no net property and very modest superannuation interests.

2. The net property of the respondent is minimal and while he has superannuation interests that can be treated as property for the purposes of s79[8], his interests are modest.

   [8] s90MS Family Law Act 1975 (Cth).

3. There is no property (after taking into account debt) from which the orders sought by the applicant can be met. This of itself may not preclude an order being made if I were persuaded that it was appropriate in the circumstances to, in effect; give the applicant priority over creditors, the existence of the debts themselves not being in issue.

4. The applicant contends that the respondent has undisclosed property and cash sufficient to meet the orders she seeks.

5. The applicant failed to produce any cogent evidence in support of such a contention.

6. The applicant sought to extrapolate an alleged non-disclosure by the respondent in the lead up to the 2009 order to support her contention of undisclosed property and cash at the present time. The alleged non-disclosures related to a Westpac bank account in his sole name in 2009 and unpaid present entitlements in a family trust in 2009.  

7. On 31 July 2009 the parties filed an Application for Consent Orders. Solicitors represented each of them and the applicant’s solicitor prepared the Order signed by the parties. The applicant sought a payment to her of $150,000 and the figures were “worked back from there” according to the applicant’s oral evidence. It does not seem that the applicant was much bothered by enquiring to any great degree as to values or liabilities at the time. She simply wanted to ensure that she received her $150,000.

8. In that Application a list of property and liabilities was included as follows:

Property	Application for consent orders
Z Street, AA Town	$800,000.00
Motor vehicle 1	$10,000.00
Motor vehicle 4	$15,000.00
furniture etc	$10,000.00
Westpac …	$18,971.62
Business G, Business H and Business E	$200,000.00
3 motorbikes	$7,200.00
GROSS PROPERTY	$1,061,171.62
LIABILITIES
Westpac mortgage on AA Town property	-$280,000.00
Westpac overdraft	-$88,000.00
Earth credit card	-$25,000.00
ANZ Visa	-$5,700.00
Amex	-$20,290.00
B Street, CC Town debt	-$182,400.00
income tax liabilities	NK
accounts payable to business	-$35,000.00
TOTAL LIABILITIES	-$636,390.00
Net property ex superannuation	$424,781.62
Superannuation
BT Superwrap	$2,000.00
Finium Super	$28,000.00
Total superannuation	$30,000.00
Net property including superannuation	$454,781.62

1. The effect of the order was said to be a 76/24[9] split in favour of the respondent and the applicant gave evidence that the disparity was intended to recognise the respondent’s ongoing financial responsibility for the children.

   [9] Paragraph 70 of the Application for Consent Orders.

2. Indeed the applicant’s financial contribution by way of child support since separation has been a modest $5,675.62.[10] Her current assessment is $53.74 per week, which the applicant deposes is under review.

   [10] Exhibit 18.

3. The effect of the order when taking into account the payment to the applicant of $150,000 effected a percentage division closer to 65/35 in favour of the respondent.  

4. In relation to the above list of property and liabilities the applicant contended that the following further items should have been included:

Property	Application for consent orders
Unpaid present entitlements of husband	$128,416.56
Unpaid present entitlements of wife	$128,502.18
Westpac account in husband’s sole name	122,724.02
Total	$379,642.76

1. Much was made at the trial by the applicant of a transfer by the respondent of $150,000 from a joint Westpac account number 734-655 61-7661 on 29 December 2008 into Westpac bank account number 034-050 19-7636 in the respondent’s sole name and the subsequent closure of the 7661 account on 6 February 2009. The applicant contends that of that sum $122,724.02 remained in the respondent’s sole account at the time of the first property settlement and was not taken into account in the property settlement.

2. In 2009 the parties also had a joint Westpac business cheque account number 034-198 17-9047 and annexure NW101 to the respondent’s affidavit filed 20 March 2015 (sworn 17 February 2015) sets out a reconciliation of the accounts 7636 (in respondent’s sole name) and 9047 (joint account). The respondent explained that subsequent to separation he was concerned that the applicant had used money that should have been available for use in the business for extravagant personal expenditure and so he withdrew funds that had been in a joint account and placed it in the account in his own name. The respondent’s accountant, Mr N, provided an affidavit in which he deposed that he:

   inspected the reconciliation of the offset account as shown in Exhibit NW11 and I am completely satisfied that funds that arrived in the offset account were transferred back to the business working account when needed.

3. He also deposed that:

   On the balance sheet for 30 June 2009 … there is an amount of the offset account showing under cash assets. This can be verified on Bank Statement No 7 (exhibit GK2), therefore showing that all movements between the cheque account and offset account have been reconciled.

4. The accountant was not required for cross-examination.

5. The amounts in the table above make no allowance for the fact that in the list of property relied upon in the Application for Consent Orders the business was included at $200,000 and the Motor vehicle 4 was included at $15,000.

6. It is unclear on the face of the Application for Consent Orders or indeed in the evidence before me, as to how the value of $200,000 was attributed to the business operated via the family trust. There was no formal valuation. The 2009 balance sheet for the trust stated that the net assets of the trust were only $5,725.23. Motor vehicle 4 is included at a negative net value of ($440.86).

7. The applicant also contended that the liability in relation to rent on the business premises of $182,400 should not have been included as it was a business expense not a personal expense.

8. The respondent gave evidence that he leased business premises after separation and that this liability represented the full rental figure for the term of the lease. He conceded that he did not have to pay it as a lump sum and in fact was paying the rent monthly and the rent was claimed as a business expense.

9. Further, the applicant contended that the debt to Centrelink in relation to overpayment of Family Tax Benefits should be included, although it was not a debt at that time. It is apparent from Exhibit 16 that at least part of that debt was levied for the period prior to separation but it is also apparent that once the applicant has filed her taxation returns the debt may vary. It is also apparent that part of the debt was levied for a period after separation. The respondent confirms that he received all payments post separation.

10. The balance sheet also included an entry under ‘cash assets’ of $122,724.02. (the precise sum alleged by the applicant to have been undisclosed in the Westpac bank account in the respondent’s sole name). Unpaid present entitlements to the applicant of $128,502.18 and to the respondent of $128,416.56 were included as liabilities.

11. The applicant conceded in cross-examination that the debt on the car she retained was paid by the respondent but was not taken into account in the figures. The debt, she said, was a similar sum to the value of the car.

12. In my view, reconstructing the property and liabilities of the parties in 2009 as best I can on the evidence, I conclude the assets and liabilities of the parties are more correctly represented as follows:

ASSETS	Application for consent orders
Z Street, AA Town	$800,000.00
Motor vehicle 1	$10,000.00
Furniture etc	$10,000.00
Westpac 179047	$18,971.62
Business G, Business H and Business E	$5,725.23
Unpaid present entitlements	$128,416.56
Unpaid present entitlements	$128,502.18
3 motorbikes	$7,200.00
GROSS ASSETS	$1,108,815.59
LIABILITIES
Westpac mortgage on AA Town property	-$280,000.00
Westpac overdraft	-$88,000.00
Earth credit card	-$25,000.00
ANZ Visa	-$5,700.00
Amex	-$20,290.00
Accounts payable to business	-$35,000.00
Centrelink debt	-$45,568.00
Debt on Motor vehicle 1	-$10,000.00
TOTAL LIABILITIES	-$509,558.00
net assets ex superannuation	$599,257.59
Superannuation
BT Superwrap	$2,000.00
Finium Super	$28,000.00
Total superannuation	$30,000.00
Net assets including superannuation	$629,257.59

1. The percentage division on the reconstructed figures was as follows:

EFFECT OF CONSENT ORDER	Wife retain	Husband retain
Motor vehicle 1	$10,000.00
Furniture etc	$5,000.00
Business E	$
Cash	$150,000.00
total net assets ex superannuation	$165,000.00
superannuation	$2,000.00
Total net assets including superannuation	$167,000.00
Z Street, AA Town	$800,000.00
Motor vehicle 4	$-
Furniture etc	$5,000.00
Westpac …	$18,971.62
Business G and Business H	$5,725.23
Unpaid present entitlements	$128,416.56
Unpaid present entitlements	$128,502.18
3 motorbikes	$7,200.00
GROSS ASSETS	$1,093,815.59
LIABILITIES
Westpac mortgage on AA Town property	-$280,000.00
Westpac overdraft	-$88,000.00
Earth credit card	-$25,000.00
ANZ Visa	-$5,700.00
Amex	-$20,290.00
B Street, CC Town debt	$-
Income tax liabilities	$-
Accounts payable to business	-$35,000.00
Debt on Motor vehicle	-$10,000.00
Cash to wife	-$150,000.00
TOTAL LIABILITIES	-$613,990.00
Net assets ex superannuation	$479,825.59
Superannuation	$28,000.00
Net assets including superannuation	$507,825.59
24.74 per cent	75.26 per cent

1. The applicant conceded that she did not have any significant involvement with the children after separation. She asserts that this was because the respondent prevented her from going to the school and from spending time with the children other than in a park supervised by him. I note that the Consent Order made in 2009 provided for the applicant to spend time with the children. The applicant unsuccessfully brought a Contravention Application against the respondent. In August 2010 she moved to North Queensland in Northern Queensland with her partner, Mr. J, and has not returned to the Sunshine Coast where the children continue to live. I do not find it necessary to make any finding as to whether the respondent prevented the applicant from spending time with the children but note, simply, that her decision to move such a distance from the children meant that it was not possible for her to spend frequent time with the children in any event.

2. There are criticisms of the applicant’s tardy disclosure by the respondent:

   a)Failure to disclose interest in an North Queensland property until 24 March 2016;

   b)Failure to disclose existence of a boat until just before the final hearing;

   c)Failure to disclose interest in ANZ Bank account in 2015 with a balance of $102, 000 (applicant said the funds were in fact loan funds but no document produced that would corroborate that).

3. There are criticisms of the respondent’s tardy disclosure by the applicant:

   a)Failure to disclose existence of Westpac bank account in his sole name until well after Consent order;

   b)Failure to disclose that the wife had unpaid present entitlements in the Hunter Family Trust prior to the Consent order.

4. The respondent did have a Westpac account in his sole name at the time of settlement the details for which do not appear to have been disclosed to the wife at the time of the 2009 order (although she acknowledges she at all relevant times had possession of the joint bank statements from which the respondent withdrew money from time to time and credited money from time to time). The actual sum in that account was accounted for in the balance sheet for the family trust and thus taken into account in the 2009 order.

5. The applicant presses for payment to her of distributions made to her from the family trust in the 2008 financial year on the basis that she did not physically receive the distributions.

6. The applicant and respondent were living together for nearly half the 2008 financial year. It is not unusual for families operating a business to do so via a discretionary family trust to ensure a tax effective means of operation. That was the case here and no doubt distributions made to all family members during that year were made for the greater family benefit. It would be entirely artificial after the event to, in effect, audit what was spent on the applicant during that year to determine if she in fact received the full benefit of the sum recorded in the financial statements as being distributed to her. Such an exercise is neither warranted nor possible given the evidence produced.

7. The applicant’s unpaid present entitlements were extinguished at the time of payment to her of the $150,000 pursuant to the 2009 order. There seems nothing exceptional about that course. Exhibit NW21 to the respondent’s affidavit filed 20 March 2015 (sworn 17 February 2015) confirms that to be the case.

8. If I am incorrect about that, it is of little moment, in my view, because the application before me is not one for enforcement but rather an order in substitution for the 2009 order.

9. The applicant produced evidence of an estimate of tax payable for the financial years,           2007, 2008 and 2009.[11] There is no current debt (I note that the 2009 tax return has been submitted and an assessment made which indicates that no amount is payable)[12] and there is no evidence before me that clarifies the basis upon which such estimates have been made. The fact that the applicant may at some future time incur a taxation debt of $28,058.58 for the 2008 financial year by reason of distributions made to her from the trust in that year is a matter to which I will have regard in determining whether to make an order as sought by her.

   [11] Exhibit 15.

   [12] Annexure JJM26 to applicant’s affidavit filed 13 January 2015.

10. What can be gleaned from the above analysis is that, firstly, when the reconstructed figures are considered, the applicant received what she bargained for i.e. about 25 per cent of the pool. Such a result was a generous one to the applicant, in my view, given the modest size of the pool and the financial burden assumed by the respondent to provide for the parties four young children. Secondly, the applicant has failed to make out her case that the respondent has hidden assets and has a capacity to meet the order sought by her. Thirdly, the applicant has failed to make out her case that any current debt of the respondent should be disregarded for the purposes of these proceedings. There was no suggestion by the applicant that the debt claimed by the respondent is not real. A significant portion of his debt is owed to secured creditors and if I were to give priority to the applicant over the other unsecured creditors I could not find that the third party debt would be able to be met. No application has been made under Part VIIIAA of the Act and the strict requirements of s90AF(3) cannot be met.

11. For the above reasons I am unable to find that it is just an equitable to make an order and I propose to dismiss the Application.

12. If I am incorrect on this and it is considered that the four step process should be undertaken, then I would nevertheless make no order for adjustment or settlement of property for the following reasons:

    a)There is no net property pool of the applicant and a minimal net property pool of the respondent even taking into account his superannuation.

    b)This was an eighteen year marriage and on the very limited evidence before me as to contributions (annexure JJM 2 to the applicant’s affidavit filed 13 January 2015 at paragraphs 71 – 74) it does not seem to be in dispute that the respective contributions of the parties were largely equal during the marriage.

    c)After separation the children remained with the respondent and he provided for their financial support with only a very modest contribution of $5,675.62 paid by the applicant since then. Even taking into account the greater initial proportion of property retained by the respondent, it was a modest property pool, and the respondent’s post separation contributions both financial by reason of his support of the children and by way of providing most of the care for the children given the mother’s living arrangements, greatly outweighed those of the applicant.

    d)The applicant may well incur a liability for income tax on a distribution to her from the family trust during the marriage and an ongoing liability to repay the overpayment of Family Benefits, and that is a matter relevant under s75(2) of the Act. As is the fact that a payment to the applicant is likely to mean a creditor would be unable to recover their debt.

    e)The respondent will continue to provide for the children, two of whom are still at school, with only a meagre contribution from the applicant.

    f)The applicant has recently commenced a tourism business in the Whitsundays with her partner and is, as yet, earning only a modest sum of $20,800 per annum with outgoings of $14,040 per annum. Her debts were conceded by the respondent for the purposes of the proceedings. Apart from her mortgage debt she has an estimated taxation debt of $30,844, a Family Benefits Tax debt of $36,602 and a debt to her partner’s mother of $22,500. Her partner earns $20,800 per annum gross. 

    g)The respondent operates a film distribution business and he discloses a gross income of $120,796 per annum with outgoings of $171,600 per annum. His debts were conceded for the purposes of the proceedings. Apart from his mortgage debt he has a taxation debt of $155,530, credit card debt of $61,464 and a debt for school fees and orthodontic expenses of $19,500. His current wife earns $105,560 per annum gross.

13. For the reasons contained herein I make the order set out at the commencement.  

I certify that the preceding sixty-seven paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 7 April 2016.

Associate:

Date:  7 April 2016