NIMITAN & NIMITAN

[2013] FamCA 447

FAMILY COURT OF AUSTRALIA

NIMITAN & NIMITAN [2013] FamCA 447

FAMILY LAW – PROPERTY – Application for property settlement orders – Where the parties had entered into property settlement orders by consent in October 2007 and subsequently, by consent, set those orders aside –  Whether just and equitable to alter property interests and rights – Stanford v Stanford [2012] HCA 52 considered – Consideration of factors under s 79 and s 75(2) of the Family Law Act 1975 (Cth) – Where the parties agreed that the financial and non-financial contributions of the parties up to the date of settlement were equal – Where an adjustment, pursuant to s 75(2), of one (1) per cent in the wife’s favour is appropriate.

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

Stanford v Stanford [2012] HCA 52

APPLICANT: Ms Nimitan

RESPONDENT: Mr Nimitan

FILE NUMBER: SYC 6145 of 2007

DATE DELIVERED: 14 June 2013

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Aldridge J

HEARING DATE: 24 & 26 April 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Fermanis

SOLICITOR FOR THE APPLICANT: Giles Payne & Co

COUNSEL FOR THE RESPONDENT: Mr Givney

SOLICITOR FOR THE RESPONDENT: Vizzone Ruggero & Associates

Orders (as amended pursuant to rule 17.02 of the family law rules)

1. That in the event that the wife pays to the husband the sum of $113,776.00 within twelve (12) weeks of 29 January 2014 the parties are to do all acts and things necessary to:

   (a)cause the husband’s interest in B Street, Suburb C to be transferred to the husband;

   (b)cause the husband’s interest in D Street, Suburb E to be transferred to the wife; and

   (c)cause the funds in the controlled money account to be paid to the husband.

2. That in the event that the wife does not pay the sum of money in accordance with Order 1 above then the parties are to:

   (a)Take all necessary steps to sell the property situate at D Street, Suburb E

   (b)For the purpose of implementing the sales referred to in Order 2(a) above the parties shall do the following:

   (i)the parties shall list the properties for sale by public auction at the earliest possible date at a price to be agreed between the parties and failing such agreement, at a price nominated by the President of the NSW Division of the Australian Property Institute or his/her nominee;

   (ii)with such agent as the parties may agree to appoint and failing agreement as to the agent within fourteen (14) days to any such agent nominated by the President of the NSW Division of the Australian Property Institute, (“the agent”), the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;

   (iii)the parties shall each cooperate in every way with the agent including (without limiting the generality of the foregoing):

   (a)    making the keys available to the agent;

   (b)    allowing inspection of the properties at all reasonable times requested by the agent;

   (c)    doing or saying nothing to hinder or prevent a sale being effected;

   (d)    ensuring that each property including the grounds are in a neat and tidy condition at the time of inspection by the agent and prospective purchasers; and

   (e)    signing all documents requested by the agents in relation to the listing for sale of each home except contracts or agreements for sale which have not been authorised by the parties’ solicitors.

   (iv)the parties shall each execute contracts for sale in the forms prepared by the solicitors having the conduct of the sales at a price agreed upon by the parties or, in the absence of any agreement, at or above the prices nominated by the President of the NSW Division of the Australian Property Institute;

   (v)the parties shall do all things and sign all documents necessary to instruct a solicitor or licensed conveyancer within seven (7) days of the date of these orders to have the primary conduct of the sales on behalf of both parties and failing agreements such solicitor or conveyancer as nominated by the President of the NSW Division of the Australian Property Institute and any costs properly paid to the solicitors will form part of the legal costs of sales and be deducted from the proceeds of sale;

   (vi)neither party may confer on any agent without the consent of the other party any right, any sole or exclusive agency in respect of the properties or to any commission; and

   (vii)if the agent shall certify in writing to the parties’ solicitors that it is reasonably necessary for the work specified in a Notice of Repairs to be carried out to the properties so as to assist in effecting a sale and provided the cost of any such work is less than $500.00 either party may cause such work to be carried out and the costs shall be recoverable by that party from the proceeds of sale.

   (c) That the proceeds of the sale of the property referred to in Order 2(a) is to be dispersed as follows:

   (i)in payment of the usual sale costs;

   (ii)in discharge of any mortgages or other encumbrances over the properties;

   (iii)in payment of any capital gains tax arising out of the sale of the properties and to enable this to be paid a sum is to be set aside and retained by the wife then paid when the capital gains tax is due and for that purpose the sum to be retained is to be calculated by the wife’s accountants;

   (iv)the balance and funds held in the controlled money account divided between the parties so that taking into account the property retained by the parties there be a distribution of the net total assets of 51 per cent to the wife and 49 per cent to the husband.

   (d)The parties are to do all things necessary to transfer the wife’s interest in B Street, Suburb C to be transferred to the husband;

3. That unless otherwise specified in these orders each party is solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s records thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age and working future provides the conditions for payment out of such payment.

4. That all applications and cross applications be and are hereby dismissed.

1. That all issues be removed from the Active Pending Cases List.

1. That all material produced on subpoena shall be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same not before fifty-six (56) days from the date of these Orders.

NOTATIONS:

1. Noted the Wife agrees to pay to the Husband by way of an adjustment the sum of $6,000.00 at the same time as the payment of $113,776.00.

2. The Court notes that:

   8.1within 7 days of the making of these Orders that the Wife shall file and serve a Notice of Discontinuance to discontinue the appeal proceedings with case number EA 95 of 2013; and

   8.2the parties agree that there shall be no order as to costs with the intention that each party shall bear their own costs in respect of the appeal proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Nimitan & Nimitan 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 SYDNEY

FILE NUMBER: SYC6145/2007

Ms Nimitan

Applicant

And

Mr Nimitan

Respondent

REASONS FOR JUDGMENT

1. These are proceedings brought by Ms Nimitan (“the wife”) pursuant to s 79 of the Family Law Act 1975.

2. Although it was her Application, having regard to earlier orders that had been made under s 79 and set aside she opposed any further order being made pursuant to s 79, at least in relation to the property owned by her, because, in her submission, it would not be just and equitable to do so.

3. In the event that a property adjustment/alteration was to be made the wife sought 53% of the parties’ assets.  She sought to have $50,000 relating to the sale of a business and a van by the husband and $18,101.47, said to be equity in F Pty Limited (in Liq)., included in the list of assets and liabilities.

4. Mr Nimitan (“the husband”) sought orders that the assets of the parties be divided equally between them.

5. These are the only issues to be determined.

6. Consent orders pursuant to s 79 of the Family Law Act were made by this Court on 10 October 2007.  Those Orders were set aside by consent on 13 September 2012.  This is a rehearing of the property proceedings between the parties.

The 2007 Orders

1. On 10 October 2007, by consent, the Court made the following orders (“the Consent Orders”):

   The parties consent to the following final orders:

   [F Pty Limited]

   1.An ORDER that the parties forthwith do all such acts and things and sign all such documents as may be necessary to cause the Second Respondent to be placed into voluntary winding up, including but not limited to:

   1.1The passing of any necessary special resolutions for the voluntary winding up of the Second Respondent; and

   1.2Comply with any requirements of the Corporations Act, 2001 (Cth) in respect of any such voluntary winding up.

   2.An ORDER that, for the purpose of such voluntary winding up, the parties forthwith do all such acts and things and sign all such documents as may be necessary to cause an Accountant to be appointed in respect of the Second Respondent, inter alia, for the purpose of acting as a liquidator to liquidate by sale all of the Second Respondent’s assets, including but not limited to:

   (a)The … business conducted by the Second Respondent (“the business”) together with equipment and goodwill; and

   (b)Money in bank accounts.

   3.An Order that the said Accountant is to be appointed by agreement between the Applicant and the First Respondent and failing such agreement the Accountant shall be nominated by the President of the Australian Institute of Chartered Accountants. 

   4.An Order that the remuneration of the Accountant shall be paid from the sale of the [Suburb G] property in the manner specified in Order 11.5.4.

   5.An Order that the parties shall do all such acts and things and sign all such documents as may be necessary to:

   5.1Provide to the Accountant and to each other full and frank disclosure as to the trading, operation, assets and affairs of the Second Respondent since 10 September 2006;

   5.2Provide to the Accountant and to each other full and frank disclosure as to any money or other assets taken from the Second Respondent or its bank accounts by the parties since 10 September 2006;

   5.3Deliver to the Accountant and to each other all books of account, financial statements and any primary documents relating to the Second Respondent and or to any transaction referred to in paragraph 5.2 above;

   5.4Comply with any reasonable request of the Accountant; and

   6.An Order that the parties direct the Accountant, after the sale of the Second Respondents assets, and payment of any proper debts and liabilities of the Second Respondent, cause the net equity of the Second Respondent to be distributed to the Applicant and the First Respondent in equal shares.

   Personal Property

   7.An ORDER that forthwith any items of personal property, furniture, furnishings and effects shall be divided between the parties in the following manner:-

   7.1The Applicant has prepared a list of the furniture and personal items contained in the home which is scheduled “A” to these Orders;

   7.2The Applicant has nominated those items on the list she wishes to retain and is forthwith declared the sole legal and equitable owner of those items;

   7.3The First Respondent is declared the sole legal and equitable owner of the remaining items on the list;

   7.4The Applicant must make available for collection by the First Respondent, or any persons nominated by him, those items on the list of which the First Respondent is the owner at any reasonable time required by the First Respondent.

   Motor Vehicle

   8. An ORDER that within seven (7) days from the date of these Orders the First Respondent shall forthwith do all such acts and things and execute all such documents as may be necessary to transfer to the Applicant free of encumbrance all of his right, title and interest in the Mitsubishi … motor vehicle registered number … and the Applicant shall be declared the sole legal and equitable owner of the said motor vehicle.

   The [Suburb E] Property

   9.An ORDER that the First Respondent shall forthwith do all such acts and things and sign all such documents so as to cause all of his right title and interest in the real property known as … [D Street, Suburb E] (“the [Suburb E] property”) to be transferred to the Applicant whereupon the Applicant shall be declared the sole legal and equitable owner of the [Suburb E] property.

   The Queensland Property

   10.An ORDER that the Applicant shall forthwith do all such acts and things and sign all such documents so as to cause all of her right title and interest in the real property known as … [B Street, Suburb C], Queensland (“the Queensland property”) to be transferred to the First Respondent whereupon the First Respondent shall be declared the sole legal and equitable owner of the Queensland property.

   The [Suburb G] Property

   11.An ORDER that the real property known as … [H Street, Suburb G] NSW (“the [Suburb G] property”) be sold and that the parties forthwith do all such acts and things and sign all such documents as may be necessary to place the [Suburb G] property on the market for sale by Auction and cause the [Suburb G] property to be sold.  And for the purpose of such sale:

   11.1A real estate agent shall be appointed to market the property for sale by the agreement of the parties and failing such agreement, a agent shall be appointed by the president of the Law Society of NSW;

   11.2The reserve price of the property shall be as agreed to by the parties and failing such agreement, the sale price shall be nominated by the real estate agent;

   11.3The solicitors for the Applicant shall be appointed to act on the sale of the property;

   11.4The Applicant and the First Respondent shall forthwith upon request by the real estate agent pay to the real estate agent, equally, any sums requested for commission, advertising, auctioneer and other expenses in relation to the said sale;

   11.5After the payment of any duties, taxes, agents commission, auctioneer fees, legal fees for acting on the sale, and other properly incurred liabilities associated with the sale of the property, the proceeds of the said sale shall be applied as follows:-

   11.5.1In discharge of the mortgage on the [Suburb G] property;

   11.5.2In discharge of the mortgage on the [Suburb E] property

   11.5.3In discharge of the mortgage on the Queensland property;

   11.5.4In payment of any costs of the Accountant appointed pursuant to Order 3 above;

   11.5.5In payment to the Applicant of an amount equal to the present capital gains tax payable on the [Suburb E] property;

   11.5.6In payment to the First Respondent of an amount equal to the present capital gains tax payable on the Queensland Property; and

   11.5.7In payment to the Applicant of any adjustment required by Order 12 below;

   11.5.8In payment to the First Respondent of any adjustment required by Order 12 below;

   11.5.9In payment to the First Respondent of $267,500.00 being an adjustment in favour of the First Respondent for the difference between the agreed value of the [Suburb E] Property and the Queensland property;

   11.5.10In payment to the First Respondent of $3,000.00 being an adjustment in favour of the First Respondent for half the value of the Mitsubishi … motor vehicle registration number …;

   11.5.11In payment to the First Respondent of any adjustment required by Order 11.9 in respect of the payment of any mortgage repayments, rates and taxes paid by the First Respondent pursuant to Order 11. 9 and 11.10;

   11.5.12In payment of the balance of the sale proceeds in equal shares between the Applicant and the First Respondent.

   11.6The property shall be listed for auction every three (3) months until it is sold;

   11.7Pending the sale, the Applicant shall have the right of exclusive occupation of the [Suburb G] property until the sale thereof;

   11.8The First Respondent shall forthwith cause his office to be removed from the [Suburb G] property;

   11.9Pending the sale, the First Respondent shall continue to pay all rates and taxes (if any) in respect of the [Suburb G], with an adjustment in favour of the First Respondent from the sale proceeds of the [Suburb G] property so that such liabilities are ultimately born equally between the Applicant and the First Respondent;

   11.10Pending the sale, the First Respondent shall ensure that the [Suburb G] property is insured in favour of both parties to an amount equivalent to the replacement value of the home at the time of effecting or renewing such insurance, with an adjustment in favour of the First Respondent from the sale proceeds of the [Suburb G] property so that such liabilities are ultimately born equally between the Applicant and the First Respondent.

   11.11For the purpose of Order 11.5.9 above the agreed values of each property shall be as set out in schedule “B” hereto.

   Account & Inquiry

   12.For the purpose of Order 11.5.7 and 11.5.8, the parties shall forthwith do all such acts and things as may be necessary to cause the Accountant appointed pursuant to Order 3 above to conduct an account, inquiry and reconciliation of the Second Respondent’s and the parties’ accounts since 10 September 2006 for the purpose of determining the following adjustments to be paid from the sale proceeds of the [Suburb G] property:

   12.1Payment to the Applicant of an amount equal to the sum of $400.00 per week net after tax, representing wages, from 10 September 2006 to the 30 June 2007 (less any wages already received by the Applicant during the said period which have not been paid back or off-set);

   12.2Payment to the First Respondent of an amount equal to the sum of $700.00 per week net after tax, representing wages, from 10 September 2006 to the 30 June 2007 (less any wages already received by the First Respondent during the said period which have not been paid back or off-set);

   12.3Payment to the Applicant of an amount equivalent to any superannuation contributions and entitlements due to her from 10 September 2006 to 30 June 2007 (less any superannuation contributions and entitlements already made to the by the Second Respondent on behalf of the Applicant in respect of this period);

   12.4Payment to the First Respondent of an amount equivalent to any superannuation contributions and entitlements due to him from 10 September 2006 to 30 June 2007 (less any superannuation contributions and entitlements already made to the by the Second Respondent on behalf of First Respondent in respect of this period);

   12.5Payment to the Applicant an amount equivalent to 50% of the sum of all funds taken by the First Respondent and the Applicant from the cash takings and bank accounts (including loan accounts) of the parties since 10 September 2006 (not being wages, except where such wages exceeded $700 per week net in the case of the First Respondent and $400 per week net in the case of the Applicant, properly incurred business expenses and not having been repaid or off-set) and then deducting from such amount any funds taken by the Applicant from the cash takings and bank accounts (including loan accounts) of the parties sunce 10 September 2006 (not being wages, except where such wages exceeded $400 per, properly incurred business expenses and not having been repaid or off-set).

   13.An Order that the parties shall do all acts and things and sign all necessary documents as may be necessary to:

   13.1Provide to the Accountant and to each other full and frank disclosure as to any funds taken by them from the cash takings and bank accounts (including loan accounts) of the parties since 10 September;

   13.2Deliver to the Accountant and to each other all books of account, financial statements, bank statements, invoices, receipts and any other relevant primary documents;

   13.3Comply with any reasonable request of the Accountant.

   Injunctions

   14.An ORDER that save for any mortgage payments, the payment of rates and outgoings in respect of the real properties referred to in these Orders, pending implementation of these Orders, the parties, themselves, their agents and servants (other than the Accountant appointed pursuant to Order 3), be and are hereby restrained from operating the following bank accounts and from withdrawing, transferring, receiving, disposing of or otherwise dealing with any monies from the following accounts:

   14.1The Business Overdraft of the Second Respondent (Account No: …57);

   14.2The St. George Bank Loan (Account No: …09 in the joint names of the Applicant and the First Respondent);

   14.3The Westpac Bank Loan (Account No: …00) in the joint names of the Applicant and the First Respondent).

   Other Declarations

   15.An ORDER that except as otherwise provided for in these Orders, the Applicant and First Respondent shall be declared the sole legal and equitable owners of any items of property and financial resources, including choses in action and superannuation entitlements, held in their respective names, possession or control, as at the date of these Orders.

   Appointment of Registrar

   16.An ORDER that in the event that either party refuses to or neglects to do any such act or thing or sign any such document as may be necessary to give effect to these Orders, a Register or an officer of the Court be appointed pursuant to Section 106A of the Family Law Act 1975 to do all such acts or things or sign any such documents as may be necessary to give effect to these Orders at the cost of the defaulting party.

   (errors as per original)

1. Difficulties arose with the enquiry and disclosure that were the subject of Orders 12 and 13 of the Consent Orders.

2. On 12 April 2010 the wife filed an Initiating Application seeking to have the Consent Orders set aside pursuant to s 79A of the Act.

3. On 13 September 2012, by consent, the Consent Orders made 10 October 2007 were set aside.

Background

1. The wife was born in 1958 and is 55 years old. The husband was born in 1954 and is 59 years old.

2. The parties commenced cohabitation in 1979 and migrated to Australia in 1980.  In that year they commenced a trade business with the husband carrying out the trade aspects. 

3. The parties were married in 1983.  There are two adult children of the relationship being born in 1981 and 1985 respectively.

4. In 1980 a company F Pty Limited was incorporated and the husband and the wife became the shareholders and directors.  From that time that company operated the trade business. 

5. In 1990 the parties purchased a property at H Street, Suburb G for $250,000.  It was financed by the parties’ savings $100,000 and a mortgage to the Westpac Bank of $150,000. 

6. In 1995 the parties purchased B Street, Suburb C, Qld for $135,000.  The parties borrowed the whole of the purchase price.  It was let out by them until after separation and the rent applied in reduction of the mortgage. 

7. In 1997 the parties purchased D Street, Suburb E for $550,000.  It was financed by the parties’ savings of $55,000 and a mortgage to the Westpac Bank of $500,000.  That property was let out until the wife commenced to occupy the property in 2007. 

8. The parties separated on 14 October 2006.  Shortly thereafter the husband drew down $69,200 on the Westpac Loan Account secured on the Suburb E property and the wife drew down $16,703 from a St George Loan Account secured on the Queensland property.

9. On 10 October 2007 the Consent Orders were made.

10. On 11 April 2008 the Suburb G property was sold realising $1,018,125.93. 

11. On 16 April 2008 F Pty Limited was placed into voluntary liquidation with Mr J appointed as the Liquidator and the accountant to conduct the enquiry under Order 12 of the Consent Orders.

12. On 18 April 2008 each of the parties received a distribution of funds of $120,000 from the sale of the Suburb G property and the balance is held in a controlled monies account. 

13. On 26 June 2008 the wife received a further distribution of $176,774.

14. On 22 October 2008 the husband sold the business he was then conducting after the separation called Business K and a van associated with that business. The husband received $50,000 for the sale.

15. On 4 December 2008 the husband received a distribution from the parties’ assets in the sum of $270,510.

16. On 27 August 2009 Mr J issued his report pursuant to Order 12 of the orders made on 10 October 2007 in relation to F Pty Limited and the parties’ dealings with it.  He made an adjustment in relation to the wages payable to the husband and wife, superannuation contributions and an adjustment in respect of cash takings and loan accounts.

17. In August 2010 the parties each received a distribution of $30,000 from the proceeds of the winding up of F Pty Limited.  A dispute then arose in relation to Mr J’s fees which resulted in interim orders being made on 29 August 2011 resulting in a payment of $55,000 to Mr J from the proceeds of the sale of the Suburb G property.

18. On 11 December 2012 the issues between the parties and Mr J were finally resolved by a further payment to Mr J of $45,000 from the proceeds of sale of the Suburb G property which was apportioned as to a payment of $16,500 by the husband and $28,500 by the wife.  At that time the court made the following notations:

    The third respondent [L Accountants] acknowledges payment by the Husband and the Wife in the sum of $55,000 and that the payment of that sum and the sum provided for in Order 2 above is in full and final settlement of all monies due to him in these proceedings and to the liquidation of the Second Respondent.

    These Orders finalise all matters, rights and interests between the Husband, the Wife, the company and the liquidator and the Third Respondent.

    It does not finalise the rights between the Husband and the Wife.

$50,000 from the sale of business k

1. It is the wife’s case that the sum of $50,000 received by the husband from the sale of the business and van should be included in the list of assets to be divided by the court.  This was because it was said to be an asset of F Pty Limited wrongly sold by the husband but not taken into account by the Liquidator in the winding up of F Pty Limited.  This is opposed by the husband.

2. It is not disputed that upon the consent orders being made on 10 October 2007 the husband ceased working for F Pty Limited.  The husband says that he then did not work until April 2008 when he commenced business as a sole trader under the business name Business K.  He sold that business on 22 October 2008 for $50,000.00.  The sale price was apportioned as to $40,952 for goodwill and the balance as to a van used in the business. 

3. It was not disputed by the husband that this van had been, and remained, an asset of F Pty Limited.  Similarly, it was not disputed that the customers of the business conducted by the husband as Business K were essentially the same as those of F Pty Limited.  The husband submitted that, in reality, any goodwill attaching to any of the businesses carried on was personal to him and, in any event, post separation he had taken on the work and the risk of business.  The husband also submitted that any claim in relation to the sale of the F Pty Limited business terminated upon the making of the orders on 11 December 2012. 

4. The issue of the date of the commencement of Business K by the husband, whether October 2007 or April 2008, does not seem to be to be of great moment.  The wife, however, submitted the earlier the business commenced the more likely it was that the new business was, in truth, the business of F Pty Limited.

5. In support of her contention as to the date of the commencement of the business the wife relies upon three matters.  The first is her evidence that she saw her husband driving around in the F Pty Limited van.  Given that he had the use of this until it was sold this is not surprising and, of itself, does not establish that he was carrying out a business or that, if he was, it was the business of F Pty Limited.

6. The second is that on 17 May 2007 the husband registered the business name Business K in his sole name and on the same day opened a bank account in his sole name.

7. The third matter is that a customer paid for work carried out at three separate addresses. The payment was directed to F Pty Limited, as opposed to Business K or the husband and was deposited into the new account.  The creditor remittance advice is for the period ending 26 March 2008.  There are three entries each dated 26 March 2008 and each is described as “journal control”. There is then a reference to particular premises, a description of the work carried out at each and the cost.  It is unlikely, for there to be a payment in respect of three invoices which have different invoice numbers (…08, …04 and …18) and for that work to have been carried out on the date of that remittance. It is much more likely that the work was carried out earlier and that the date referred to on the remittance advice is the date of the journal entry of the payment.  The husband said, without contradiction, that it could take months to get paid. On balance, I find it is more likely than not that these payments were for work carried out by F Pty Limited.  The remittance advice does not establish that the husband was carrying out work as Business K in March 2008 or earlier.

8. Thus despite the registration of the business name and the opening of the bank account there is no evidence that the husband actually conducted his business as Business K prior to April 2008.

9. There is no evidence as to the likely sale price had F Pty Limited been able to sell its undertaking.  It was submitted by the husband that the sale price would be influenced by whether or not the husband was prepared to enter into a non-competition agreement.  There was no evidence as to the effect of a refusal to enter into a non-competition agreement.  There was no evidence as to whether he would do so or not.  Thus a concluded view on the matter cannot be reached.

10. I reject the husband’s proposition that as he took on the actual work of the business and the risks associated with it he was entitled to sell the business and keep the proceeds for himself.  If he did so using or converting the assets of F Pty Limited he would be liable to the company for that course.

11. The last submission of the husband was that this claim by the wife was defeated by the orders of 11 December 2012 set out above. The notation, which I repeat for convenience, was:

    These orders finalise all matters, rights and interests between the Husband, the Wife and the company and Liquidator and the Third Respondent.

12. There had been many issues raised between the liquidator and the parties.  Mr J had been specifically required to consider and make adjustments to the company’s accounts with the parties.

13. Exhibited to the wife’s Affidavit were 136 pages of reports and correspondence from Mr J.  I indicated to the parties that I would only take into account those pages that were specifically drawn to my attention.  Ultimately, I was referred to but one.  That is a summary of adjustments made to the accounts by Mr J.  The alleged dealing with the assets of F Pty Limited was not included.

14. On 31 March 2008 the wife’s lawyers informed Mr J that “it appears from the statement that [the husband] is still operating a business under the company”.

15. It was not disputed the husband sold a vehicle belonging to F Pty Limited and kept the proceeds.  Even if all, or a portion of the $42,500 he received for the goodwill of the business in fact represented goodwill of F Pty Limited and not him personally it was goodwill of F Pty Limited and not that of the shareholders themselves.  A claimant for the wrongful dealing with the assets of F Pty Limited would be the company itself.  A claim by F Pty Limited, or its Liquidator, for the recovery of the proceeds of the sale of the van or goodwill, if it was goodwill of the company, fits firmly within “all matters, rights and interests between the company and the Liquidator and the Husband”.  F Pty Limited, under the control of the Liquidator, had the right to claim against the husband for the wrongful sale (if it was wrongful).  It therefore is included in the phrase “all matters, rights and interests”. To the extent F Pty Limited or the Liquidator had a claim it has been released.  The wife cannot pursue it.

16. For these reasons this claim by the wife fails.

The Claim for $18,101.47

1. The wife seeks inclusion in the list of assets available for distribution $18,101.74 which she asserts Mr J found to be owed by the husband.

2. This claim arises from a schedule attached to a report to the parties from Mr J dated 9 February 2010 in which he reports on the current position of the winding up of F Pty Limited.  The attachment to that report is entitled “a schedule showing a plan of estimated distribution of the surplus assets of the company”.  The schedule required the husband to make a payment to the company of $9,778.42 and the wife to receive a payment from the company of $6,157.58.  The figure of $18,101.47 appears at the bottom of that schedule under the heading “Reconciliation of cash at bank and cash receipts” and is a total of the cash at bank and the amount payable by the husband to finalise the distribution of the assets.  It again appears as the balancing item in the distribution of those funds of which $11,943.89 represented the costs of winding up and the balance was the sum payable to the wife.

3. The sum of $18,101.47 does not represent an asset.  It is an accounting entry only.  In those circumstances it is not an asset payable to or receivable by the husband.

The Balance Sheet

1. There was no other dispute as to the items which be listed as assets and liabilities.  In particular the parties agreed that their superannuation entitlements should be placed within the general asset pool and not dealt with separately.  The funds in the controlled money account represent the balance of the proceeds of sale of the property at H Street, Suburb G. 

2. The wife sought to include in the balance sheet a liability for Capital Gains Tax that would arise upon the sale of the property at Suburb E.  I will not do that because the appropriate step is to require the Capital Gains Tax to be paid prior to the distribution of the proceeds to the parties. 

3. The wife presently owes $42,614 to the Bank of Queensland pursuant to a mortgage.  These funds were borrowed to pay credit card bills and legal fees of $25,000.  There is no basis for including the sum of $25,000 as a liability of the parties.  In addition to the balance of the mortgage which was used to pay credit cards, the wife has present credit card debt of $16,000.  There are three cards, two being obtained by the Wife at or after separation.  As to the third there was approximately $3,000 owing at the time of separation.  The Wife gave no evidence as to the goods or services acquired with the credit cards.

4. I accept the submission of counsel for the husband that having regard to the time that has elapsed since separation in 2006 and there being only one credit card with a debt of $3 000 at the time of separation it is more likely than not that the expenses on those cards relate to post separation expenses.  I do not propose to include them as liabilities in the balance sheet.

5. The balance sheet is therefore thus at the time of the hearing:

BALANCE SHEET
Assets	Joint	Wife	Husband
D Street, Suburb E	$1,000,000
B Street, Suburb C, Qld	$305,000
Sale proceeds	$245,234
Car	$6,000
Household Contents Husband	$7,000
Household Contents Wife	$5,000
Assets Totals	$1,550,234	$11,000	$7,000
Total assets  $1,568,234

Liabilities	Joint	Wife	Husband
Nil
Total Liabilities
Nil
Add Backs	Joint	Wife	Husband
Interim property distributions – Wife	$180,000
Interim property distributions – Wife	$16,078
Interim property distributions – Wife	$176,774
Interim property distributions – Husband	$270,500
Interim property distributions – Husband	$180,000
Sub-Total Add Backs	$372,852	$450,500
Total Add-backs	$823,352
Wife’s superannuation – One Path	$44,609
Husband’s superannuation – One Path	$72,477
Total superannuation	$117,086
Total Assets	$2,508,672
Less Total Liabilities
Net Assets	$2,508,672

Section 79(2)

1. Section 79(2) of the Act provides:

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

2. In Stanford v Stanford [2012] HCA 52 the High Court said at 42:

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

3. It is just and equitable to make a property settlement order in this case because during the marriage the parties acquired through their joint endeavours a number of properties used by them, one of which was used as a home and the others were rented out for the benefit of the parties.  The marriage has ended.  There is no longer a basis for them continuing to hold these properties together for the furtherance of their joint interests.  The common assumption that they would hold those properties together for their mutual benefit is over. 

4. It was submitted by the wife that because there had been an agreed property distribution and that the parties have moved on since it would not be just and equitable to make a property settlement order.  This submission overlooks the fact that the property settlement orders were set aside and that the parties still have interests in properties in circumstances requiring a property settlement.

Section 79(4) Considerations

1. The parties agreed that the financial and non-financial contributions of the parties up to the date of settlement were equal.  This was a long marriage.  Each of the parties worked long hours with the husband devoting more time to the business and the wife more to the raising of the family.  They commenced cohabiting with few assets but throughout the marriage they were able to acquire a number of properties.  I find their financial and non-financial contributions to be equal.

Section 75(2) Factors

1. Each of the parties is towards the end of their working life.  The husband has not worked since October 2008 and has been living off interest and capital since.  He has not looked for work in the last four years.  The husband tendered two medical certificates.  The certificate dated 17 June 2007 is irrelevant to his present condition.  The medical certificate dated 17 April 2013 merely says

   [The husband] has a mood disorder.  Pt has a few stressors. Symptoms manifested by episodic insomnia, dysthymia and anxiety.   

2. The doctor does not provide any further information that would enable the court to understand his opinion. He does not state on what basis he made that diagnosis or the effect of it, if any, upon the husband’s capacity for work.  He was not called to give evidence.  The opinion thus carries little weight.

3. I am not satisfied that the husband does not have some residual capacity for work.  He worked throughout the marriage and for sometime after separation. The husband says that because the stress caused by these proceedings he has not been capable of working but he is hopeful that upon their termination his health and outlook on life will recover.  Some capacity for work is likely to return.

4. The wife is currently employed as a personal services consultant working three days per week earning $550 gross.  This is the occupation for which she was trained prior to arriving in Australia in 1980.  She said that she finds it hard to cope with the long days on her feet and this required her to reduce her work load to three days per week at some time in 2010. 

5. Pursuant to these orders each party will have a significant capital sum available to them.  They each have the capacity for some employment.

6. The husband, until the property at H Street, Suburb G was sold, paid the mortgage payments on that property whilst the wife lived there without paying rent.  The source of these payments, however, can only have been F Pty Limited or other assets of the parties.

7. The husband submitted that there should be no adjustment pursuant to s 75(2) taking account the health of the parties, the fact that each will retain a property and significant capital from these proceedings, their earning capacities, the parties’ standard of living and their commitments. There was no evidence as to the financial circumstances of any person cohabiting with either of the parties.

1. The wife did not suggest otherwise but did rely upon two further matters to justify her submission that a three per cent (%) adjustment in her favour is appropriate. 

2. The first was that as she had lived in the property at Suburb E for some time, doing so in reliance upon the Consent Orders and that as she may well be required to sell that property an adjustment under s 75(2)(o) in her favour is justified. That subsection enables the court to take into account any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account. Whilst there will be costs associated with the sale they will be borne by both parties. It is likely that it will be upsetting for the wife to have to sell the Suburb E property of which she is the sole registered proprietor (the husband’s interest being transferred to her pursuant to the Consent Orders). It remains, however, an asset of the parties available for distribution. The emotional impact of a particular property having to be sold, of itself, does not require that there be an adjustment of the parties’ property rights so as to enable that party to keep it or to compensate for the emotional effect of losing it. Such adjustments would be impossible to quantify on any rational basis. I was not taken to any authorities that support such an adjustment.

3. I am not satisfied that, in the circumstances relied upon by the wife, justice requires an adjustment in her favour.

4. The second matter relied upon by the wife is that the husband has received $50,000 from the sale of property – whether it was owned by F Pty Limited or owned by him.  For the reasons I gave earlier, to the extent the sale involved assets of F Pty Limited, it is not being taken into account in the balance sheet because any rights to claim that have been subsumed by the orders of 11 December 2012. 

5. The fact remains, however, that the husband received the benefit of the sale, namely $50,000, to the exclusion of the wife. Whether it was an asset of F Pty Limited or not, the wife, through the contributions noted earlier, contributed to the acquisition and development of this asset.  I was not referred to any matter other than the notation referred to earlier which suggests, that as between the husband and the wife, the receipt of the proceeds of this sale has been taken into account.

6. It is therefore appropriate to recognise that the wife has made a contribution to those funds received by the husband.  Given that there has been a finding that the parties made an equal financial and non-financial contribution to their assets it would be appropriate for the wife to receive one half of this sum.  It is true that the husband carried out some work in relation to this business post separation but he did so using the assets and business knowledge acquired during the marriage.

7. Justice therefore requires that this circumstance be taken into account under s 75(2)(o). The net assets of the parties, including add-backs for prior distributions, is $2 508 672. The sum of $25 000 roughly equates to one per cent of the asset pool and an adjustment should be made to reflect that contribution by that percentage.

8. Taking all these matters into account it is appropriate that there be an adjustment of one per cent in favour of the wife.

Form of Orders

1. From the total asset pool of $2,508,672 the wife is to receive $1,279,423 (51 percent) and the husband $1,229, 249. 

2. The husband has in his possession or has received $836,977.  This is made up of:

   Home contents   $7,000

   B Street, Suburb C, Qld       $305,000

   Distributions  $180,000

   Distributions   $270,500

   Superannuation   $72,447

   Total:$834,947

3. The wife has expressed the desire to retain, if possible, the D Street, Suburb E property.  Therefore an order to effect the above property distribution the sum of $394,302 ($1,229,249 - $834,947 = $394,302) must be paid to the husband.  There is the sum of $245,234 in the controlled money account to be dealt with.  If all of that is paid to the husband he will require a further $149,068 to obtain the determined percentage of the net assets. 

4. Thus in order to retain the D Street, Suburb E property valued at $1,000,000 the Wife must pay to the Husband $149,068.

5. The Wife has an existing mortgage facility upon which she is able to draw down a further sum of $78,000.  I do not know whether or not she has the ability to borrow another sum of $71,000 in order for the necessary payment to be made to the husband for her to retain the property.  Given that it was a strong desire for the wife to retain the property and that there was no opposition to that course if it was possible, it is appropriate to give the wife the opportunity to take steps to retain the property.  I shall therefore give the wife twelve (12) weeks to pay to the Husband $149,068.  In the event that she does not do so there will be orders for the Suburb E property to be sold and the net proceeds, after Capital Gains Tax have been paid be divided between the parties so as to give the wife 51 percent of the total net assets and the Husband 49 percent. 

6. The husband is to retain the Queensland property.  Each party is otherwise to retain the assets in their possession and their superannuation entitlements.

I certify that the preceding seventy-eight (78) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 14 June 2013.

Associate: 

Date:  11 June 2013