On & On (No. 11)

[2007] FamCA 677

[2007] FamCA 677

FAMILY LAW ACT 1975

FAMILY COURT OF AUSTRALIA  

AT MELBOURNE  NO. MLF 7114 of 2001 

IN THE MATTER OF:

MRS ON   (Wife)

and

MR ON  (Husband)

(No. 11)

JUDGMENT DELIVERED BY
THE HONOURABLE JUSTICE GUEST

Date of Hearing:               22, 23, 26, 27, 28 February, 1, 2, 5, 6, 7 March 2007
Date of Judgment:            10 July 2007

Appearances:

Mr Andrew Kirkham QC, with Mr Sweeney of counsel, instructed by Kennedy Wisewoulds, Solicitors, on behalf of the Applicant (wife)

The Respondent (husband) in person

CATCHWORDS:

FAMILY LAW – PROPERTY - DIVISION OF MATRIMONIAL PROPERTY - 30 year marriage- neither party had assets at the start of the marriage- considerable asset portfolio built up prior to separation including a Pharmaceutical Business, various trusts and companies which the wife estimated at $15 million as a pool- Husband asserted pool closer to $1.3 million- Husband systematically mismanaged and wasted joint funds post separating significantly reducing the available assets- Whether add-backs appropriate- determination of the disparate submissions as to the property pool value- husband’s conduct at the hearing; whether there should be a Jones v Dunkel inference-relevance and treatment of the husband’s appearance in person-treatment of husband’s post separation financial conduct.

Evidence Act 1995 (Cth) s 140(1) and (2)
Family Law Act 1975 (Cth) s 75(2); s 75(4)(a) to (c) (inclusive); s 79(4)(a) to (e)
Family Law Rules 2004 (Cth) Rule 15.06(3); Rule 19.04(2)

Oriolo v Oriolo (1985) FLC 91-653 at p 80,256
Re. F; Litigants in Person Guidelines (2001) FLC 93-072
Jones v Dunkel (1959) 101 CLR 298 at p 320 to 321
Fabre v Arenales (1992) 27 NSWLR 437 at 449
Attorney-General for the Commonwealth of Australia and Others; Ex parte Skyring (1996) 70 ALJF 321
Neil v Nott (1994) 68 ALJR 509 at 510
Ferraro v Ferraro (1993) FLC 92-335
Clauson v Clauson (1995) FLC 92-595
JEL v DDF (2001) FLC 93-075
Giunti v Giunti (1986) FLC 91-759
Black v Kellner (1992) FLC 92-287
Weir v Weir (1993) FLC 92-338
Minagall v Ayres (1996) SASR 151 at 154
Government Insurance Office of New South Wales v Bailey (1992) 27 NSWLR 304 at 313
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 273-4
Louth v Diprose (1992) 175 CLR 621 at 640
Hickey v Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at par 39
Chang v Su (2002) FLC 93-117
Kannis v Kannis (2002) Fam CA 1150
Kowaliw v Kowaliw (1981) FLC 19-092
Omacini v Omacini (2005) 93-218
DJM v JLM (1998) FLC 92-816
Townsend v Townsend (1995) FLC 92-569
Browne v Green (1999) FLC 92-873 at 86,360
DJM and JLM (1998) FLC 92-816
SMB v MFB [2006] Fam CA 46
Williams v Williams (1984) FLC 91-541

INTRODUCTION

1. The husband and the wife married on 29 December 1966.  Following a union in excess of one third of a century, they separated on 5 July 2001 and thereafter commenced a journey pitted with rancour and bitterness, the husband’s attitude being underscored in a message left by him on the wife’s answering machine on 24 October 2003 as follows:

   “I’ve been trying to think of a word about my feelings, about [the UK], and I’ve eventually settled on one, and it’s called ‘desolation’ … I am resolved, totally resolved, that you’ll find the same desolation.  You think you are lonely, you think you’re disappointed when I left?  The desolation you are about to face you have never faced before …”

   (par 257 Wife’s affidavit filed 2 February 2007)

2. Through their joint efforts over a long marriage, they accumulated significant wealth by the time of their separation, including two UK properties, but such was the dispirited state of their separation that the wife instituted proceedings on 5 November, 2001 seeking final orders for (inter alia) alteration of property interest and periodic spousal maintenance.  On 29 November 2001 the husband filed a Response and sought (inter alia) that the former matrimonial home of the parties situate at T (the T property) be sold and the wife paid $4million in full satisfaction of all property and spousal claims. 

3. The litigation pathway of the parties thereafter to the commencement of the trial before me on 22 February 2007 maintained an intensity of considerable dimension.  It was the constant complaint of the wife that the husband failed in his duty to the court to make full and frank disclosure of all material facts to both herself and the court thereby causing delays with “consequent escalation of legal, accounting and other expenses” relying upon what the Full Court had to say in Oriolo v Oriolo (1985) FLC 91-653 at p 80,256. This, the husband denied. The litigation included an embittered trial before Bell J over several days in August and September 2004 followed by a successful appeal brought by the husband with judgment being handed down by the Full Court on 22 November 2005.

4. A further complicating factor adding to the degree of difficulty in these proceedings included an order made by Bell J on 29 October 2004 refusing an application by the wife filed 20 October 2004 to stay certain of his Honour’s orders made on 8 September 2004, which included an order that she pay to the husband the sum of $938,404 on or before 11 November 2004.  In summary, the overall effect of his Honour’s orders was that the wife retain the T property subject to payment of the lump sum and that the husband retain all other assets and be otherwise responsible for all liabilities.  Unfortunately, there was an error in his Honour’s substantive judgment.

5. It was the complaint of the wife that the husband acted variously in a clandestine manner, recklessly and dishonestly in his dealings with the assets of the parties both retained and later acquired by him and was underhand, indeed, unprincipled in his failure to disclose various of his dealings.  She claimed that his distressed financial position at trial was self inflicted by reason of his profligate, irresponsible and wanton spending which included the purchase of a luxury cliff top property at SR1A-1B (“[the A property]”) and which was initially styled by him as his “weekender”.  The total purchase price of that property was $6.5 million thus generating responsibility for substantial, indeed crushing interest payments totalling about $33,000 per calendar month.  This, the wife asserted, was to the detriment of his business, the assets accumulated by them and prudent commercial management. 

6. During the course of the trial, I directed that the parties provide to the court and exchange letters in compliance with Rule 19.04(2) of the Family Law Rules 2004 (“the Rules”). The total costs of the wife to date of trial amounted to a staggering $998,698 and those of the husband were estimated at $724,476. Under letter dated 22 February 2007 the wife was informed that her costs for preparation of trial ranged between $50,000 and $75,000 and that counsel and solicitors costs for trial were estimated at $15,000 to $20,000 per day. Such was the measure of the contest in these proceedings and added to substantially, it is doubtless, by the mis-trial in late 2004.

7. The husband has conducted the trial as a litigant in person.  By reason of that fact I have been both alert and sensitive to my duties and obligations summarised by the Full Court in Re. F; Litigants in Person Guidelines (2001) FLC 93-072. During the afternoon of the first day of trial, the husband applied for an adjournment in order to seek legal representation. This I refused for the reasons set out in my ex tempore judgment delivered that day.

8. It was agreed that at the time of separation the parties had through their joint efforts amassed considerable wealth.  Their respective assessments however were hallmarked by the breadth of disparity ranging from the wife’s assessment at “well over $15 million” (par 70 of her trial affidavit) to an estimated $6.850 million provided by the husband at trial.  I propose to deal with this issue in more detail later in the course of my judgment.

9. The asset position at the trial before me however changed strikingly with the husband assessing the “available matrimonial asset pool” at $3 million (Case Outline Document page 2) and on behalf of the wife, a substantially greater sum but which included “notional add backs” arising from the husband’s alleged gross financial imprudence, mismanagement and wastage.  It is to be noted however, that by Schedule “O” to the husband’s Form 13 Financial Statement filed 13 February 2007 he represented assets in his name or under his control at $10,270,491 and liabilities at $12,940,553 asserting that “these numbers will change (“greater liabilities and the husband personally in greater debt”)”.

10. In his final submissions (Schedule 10) and putting aside the issue of notional add-backs and alleged wastage, the husband assessed the nett asset pool at $1,306,792.  For the wife, it was submitted that the nett assets of herself and the husband amounted to $3,952,335, but when taking into account notional add-backs ($6,613,982) and wastage caused by the husband ($4,436,374) the total “notional assets” amounted to $15,002,691.  That, however was very much in issue between the parties.

11. Ultimately, those issues featured prominently in the trial together with responsibility for the enormous debt that had accumulated by the time the trial commenced before me.  Thus it was that from a very comfortable net asset base of several millions of dollars at the time of separation and under the management of the husband alone without consultation with the wife, the net worth of the parties, putting aside the issue of “add-backs” and “wastage” had been reduced, on the husband’s version of the evidence, to a modest $1,306,792.

BACKGROUND

1. The wife was born in July 1941.  She is almost 66 years of age and continues to reside in the T property.  She is engaged in full time home duties and has not re-partnered.

2. The husband was born in December 1941 and is 65 years of age.  He is a business manager.  He was re-married to Ms M on 14 October 2006.  Ms M was born in April 1966 and is 41 years of age.  Both the husband and his present wife live in rented accommodation at D property. 

3. The husband and the wife were married on 29 December 1966.  At the time of their marriage, neither party owned any assets of significance.  The husband was engaged in full time employment as a health professional and the wife was also working full time as a public servant.  Between January 1968 and August 1970 they travelled extensively overseas.  Upon their return to Australia the husband established a business in V in which they both worked on a full time basis. 

4. The parties adopted four children during the course of their union.  Their first child, S was born in June 1974 in South East Asia.  Their second child, D was born in February 1977 in South East Asia and their third child, C was born in March 1981 in South East Asia.  Their final child, N was born in March 1983 in South East Asia. 

5. During the course of their marriage, the parties purchased and sold various pieces of real estate. The husband, with the assistance of the wife established the first business in V in December 1970 and thereafter he was involved in the acquisition and sale of other businesses, the details of which are not necessary for me to record in this judgment given that the parties have sensibly agreed upon their respective contributions over their long union being treated equally for the purposes of s 79(4) of the Family Law Act 1975 (“the Act”).

6. On 20 September 1991, the parties created the RS Discretionary Trust of which S Pty Ltd was the trustee.  The husband was nominated as the Appointor and Guardian of the Trust.  The beneficiaries comprised the parties, their children and the husband, as trustee of the ON Family Trust.  In late 1996 S Pty Ltd purchased the leasehold at BR for $275,000 and a vacant block of land at SR2 for $105,000.  Subsequently, following separation these properties were transferred to W Pty Ltd.  The husband and the wife had earlier in May 1981 purchased in their joint names the property at SR3 for $38,000 which is adjacent to the SR2 property.  That property was also subsequently transferred to W Pty Ltd as trustee of the WN Family Trust.

7. The husband and the wife acquired part of the T property in March 1983 and later purchased the property at G1, UK in 1988.  Both those properties were acquired in their joint names.  This was followed by their acquisition of the property at G2, UK in about December 1995 which was registered in the name of SI Ltd, the shares in which were held by WM Ltd and WT Ltd on trust for CS Company.  The properties at G1, and G2, UK were thus held in the name of SI Ltd at the time of separation.

8. On 25 March 2006 the husband contracted to sell the land at SR2 for $310,000.  Subsequently, on 28 April 2006 the contract of sale was settled with a balance payable of $279,255.13, of which $277,690.19 was paid to the Commonwealth Bank and the balance to the husband’s solicitors.  The husband controlled these monies to the exclusion of the wife.

9. In relation to the property at SR3 the husband entered into a contract to sell the property on 20 March 2005 for $810,000.  On 20 April 2005 settlement was effected with the husband paying $100,000 to his solicitors and the balance applied towards the second instalment on the deposit of the house and land at SR1A (being part of the A property), which I will discuss later in more detail. Again, it was the husband who controlled the disbursement of those monies.

10. A significant event occurred in August 1997 when the parties sold the R business for $2.3 million.  The nett proceeds of sale were used to pay for a re-fit of the CBD2 business and to acquire T property for $1 million.  Earlier, the parties had established a business in the CBD1 in 1985 and in 1991 this business was relocated to a CBD retail centre.  At first, two businesses were established but one later closed down.  The business operated through S Pty Ltd.

11. On 8 October 2000, shortly prior to separation, the husband entered a contract to purchase E apartment for $1.575 million.  Although the wife was aware that he had entertained discussions for the acquisition of an apartment at E, she claimed that she was unaware that the husband in fact had entered into a contract of sale for the acquisition of that specific apartment until after they had separated.  The husband claims otherwise. 

12. On 27 February 2006 the husband settled the contract for the purchase of E apartment in the sum of $1,614,822.30 by borrowing the whole of the funds required.  The circumstances in which this apartment was acquired and the financial impost it has rendered upon the financial position of the parties featured prominently in the course of the trial.  It was, as claimed by the wife, part of the husband’s financial recklessness and commercial imprudence for which she ought not share responsibility.

13. Another significant aspect of the proceedings before me concerned the husband entering into a contract for the purchase of F property on 31 January 2001, the purchase price of which was $665,000.  The contract of sale was settled on 2 March 2001, the deposit having earlier been drawn by the husband through S Pty Ltd.  Overall, the husband contributed $136,430.  A further amount of $530,000 was raised through a loan from the Bank of Melbourne. 

14. I propose to discuss this transaction later in the course of the judgment.  In any event, the F property was sold on 25 February 2005 with an amount of $646,671.79 being paid at settlement.  Of that, $518,856.98 was applied to discharge a mortgage in favour of the CBA and the balance of $125,451.85 paid to ES Pty Ltd.

15. The husband and the wife separated in quite unhappy circumstances on 5 July 2001.  Earlier, in about August 2000 the husband had commenced a relationship with Ms L and about which I have more to say later in this judgment.  At the time of separation, the husband commenced renting premises at J property for which he paid rent in the sum of $2,383 per month. 

16. A highly significant event occurred on 23 July 2001 when the husband contracted to purchase the property at G3, UK for £1,325,000 with settlement in September 2001.  He claimed that although it was of “high quality”, it required significant renovation for rental purposes and that a loan of £1,450,000 was taken out to meet the purchase price and “associated costs”.  In addition, he caused a further £100,000 to be borrowed to “fund renovations”.  Thus, it appears that this property was purchased at an overall cost to the parties of some £1,550,000 (husband’s trial affidavit at par 66).

17. The relationship between the parties worsened and ultimately the wife commenced proceedings seeking final and interim orders on 5 November 2001.  On that day, ex parte orders were made that (in summary):

    ·until further order, the husband be restrained from encumbering or dealing with any assets in his name or in the joint names of the parties without the wife’s written consent first had and obtained or without order of the court; and that he be restrained

    ·from selling, alienating, encumbering or dealing with any assets standing in the names of (inter alia) S Pty Ltd and W Pty Ltd other than in the normal course of business without the consent of the wife or order of the court.

18. The wife’s application was otherwise adjourned for hearing before Frederico J on 29 November 2001.  On that day, urgent interim spousal maintenance orders were made in favour of the wife, orders made by way of child support and it was further ordered that the injunctions made on 5 November 2001 by Wilczek, J remain in full force and effect, noting that the wife shall not unreasonably withhold her consent to the husband refinancing the business with the Bendigo Bank, provided:

    ·the existing facility was not increased by more than $50,000 without her written consent, and that

    ·the wife be provided with copies of all documents relating to the financing.

19. The situation did not improve between the parties and on 18 April 2002 the wife caused to be issued an application for orders which were amended by her on 1 May 2002.  Prior to that, the husband filed a Response on 29 April 2002 which ultimately, on 2 May 2002 brought into being a number of consent orders concerning the re-financing of the Bank of Melbourne loan permitting the husband to borrow up to $1 million secured over the business and to be applied to discharge a mortgage secured over the SR1 property.  There were a number of further detailed orders made which I need not recite in this judgment.

20. On 7 December 2002 the husband signed a contract for the purchase of UR property for $275,000 by paying a deposit of 10%.  The contract of sale was settled on 30 March 2003 with the husband borrowing $220,000 from the Bendigo Bank.  He sold the apartment on 30 July 2004, receiving nett proceeds of $59,901.69. 

21. A further significant aspect of the wife’s case was directed towards the husband’s conduct during the course of the proceedings.  On 1 April 2003 Kay J found that the husband did, without reasonable excuse, breach orders made on 2 May 2002 (failure to pay maintenance and attending the SR1 property without giving the wife appropriate notice) and placed him on a recognizance in the sum of $15,000 conditional upon (inter alia) paying arrears of maintenance of $30,802.  On 23 April 2003 the husband borrowed $100,000 from LI Pty Ltd for one year payable at 10 per cent (or $833.33 per month) of which he used $30,802 to discharge his obligations pursuant to the orders of Kay J made on 1 April 2003. 

22. On 1 October 2003 orders were made by consent that provided (inter alia) for the sale of the properties at G1 and G2, UK and on 18 December 2003, without advising the wife of the fact, the husband entered into a contract for the sale of G2, UK for £1.175 million.  The purchaser paid a deposit of £58,750 and on 30 January 2004 settlement was effected with the husband receiving the nett proceeds of sale in the sum of £344,965.00.  The husband controlled the disposal of the proceeds.

1. On 15 June 2006 the husband signed a contract for the sale of G1, UK for £1.575 million.  It was claimed by the wife that although a copy of the contract of sale had not been made available (despite many requests made by her that the husband produce the document) it appeared that a deposit of £160,000 was paid with settlement due to be effected on 2 August 2006.  On 3 August 2006 the amount of $1,349,132.79 was paid into the account of S Pty Ltd at the Bendigo Bank.  The husband’s conduct in relation to the disposition of this property drew trenchant criticism from Mr Kirkham in the course of the proceedings and which I shall detail later in the course of this judgment. 

2. The remaining property at G3, UK was sold on 17 January 2006.  The sale price was £1.294 million.  It was claimed by the wife that two settlement statements were provided and that by reconstructing the sale from discovered documents, the proceeds, nett of selling costs were applied:

   ·in redemption of a mortgage in the sum of either £872,538.07 or £868,159.60;

   ·$852,745.00 was paid into the husband’s Bendigo Bank account, and

   ·£6,872.00 (approximately $16,955) was paid into the SI Ltd account.

   It was also asserted by the wife that on 9 February 2006 it appeared the sum of £8,729.31 was transferred from that account to DI Pty Ltd.  As previously, it was the husband who controlled the distribution of the funds.

3. An important issue also concerned the husband exercising an option to establish another business at CBD2.  For that purpose, The EN Unit Trust was established, the trustee of which is EN Nominees Pty Ltd.  It was alleged by the wife that in early 2002 the husband prepared himself for the closure of a large department store which was scheduled to take place in July 2002.  Renovations to the CBD retail centre in fact commenced in about January 2003 and were fully completed by October 2005, a considerable time after the anticipated completion date.  It was in March 2004 that the husband exercised his option, as I said, to open the “new [business]”.  That was his decision, and his alone without any consultation with the wife and or her advisors.

4. The first trial commenced on 30 August 2004 before Bell J with judgment being expeditiously delivered on 8 September 2004.  The husband caused to be filed a Notice of Appeal on 8 October 2004 seeking (inter alia) a discharge of all orders made by his Honour and that the applications be remitted for re-hearing.  On 20 October 2004 the wife sought (inter alia) that orders numbered 1, 2, 3, 7, 9, 11 and 14 of the final orders made by his Honour be stayed pending further order or written agreement between the parties.  On 27 October 2004 the husband filed a Response.  He sought an order that the wife’s application be dismissed and that she be restrained from selling, transferring or encumbering the former matrimonial home to a total sum exceeding $1,500,000.  On 29 October 2004, his Honour ordered that both the husband and the wife’s applications be dismissed and that the costs be reserved to the Full Court. 

5. On that day, it was claimed by the wife that the husband gave an “undertaking” that he would give her at least 14 days’ notice if he intended to sell, encumber or otherwise deal with the assets in his ownership.  That too became a feature in the proceedings before me and which I shall deal with later in the course of the judgment.  The appeal was listed for argument on 2 March 2005 and on 22 November 2005 it was ordered by the Full Court that the appeal be allowed, that the orders made on 8 September 2004 be set aside and the matter be remitted for re-hearing. 

6. It is not unfair to observe that the legal costs incurred by the parties resulting from his Honour’s judgment and necessarily involved in the re-trial before me have been substantial. 

7. So as to comply with the orders made by Bell J, the wife borrowed an interest only loan from Australian Securities Limited in the sum of $1,700,000 which funds were applied as to $938,404 being paid to the husband on 10 November 2004 and the balance being to meet prepayment of interest and charges, legal costs and funds for her support.  On 15 October 2006 the wife borrowed a further amount of $425,000 from Australian Securities Limited, secured by way of first mortgage over the T property.  Ultimately, a further order was made permitting the wife to borrow up to a maximum of $2,300,000.

8. One of the more contentious and significant aspects of the proceedings before me concerned the husband entering into a contract of sale on 19 January 2005 to purchase the A property.  The total acquisition price for the house block component at A property was $4.15 million with balance due in September 2005.  The purchase price of the tennis court block component at SR1B was $2.33 million, with settlement due on 31 October 2006. 

9. On 25 April 2005 the husband settled the second instalment on the acquisition of SR1B property and on 6 October 2005 settled the purchase by payment of $3,170,000 from borrowed funds.  On 31 October 2006 he settled the purchase of SR1A property by financing all existing loans and borrowing overall $5,430,000 with interest pre-paid until 4 May 2007. 

10. Whilst awaiting trial in the proceedings before me, the husband was also involved in proceedings before VCAT.  It is common ground that the issue of whether or not he had a potential claim against the CBD retail centre management was not raised in the course of the trial before Bell J and became an issue in the trial before me.  In the event, the CBD retail centre management issued proceedings against S Pty Ltd on 5 May 2005 seeking arrears of rent.  On 24 June 2005 S Pty Ltd counter claimed seeking financial compensation for losses allegedly arising out of the renovation of the CBD retail centre.  The proceedings commenced on 18 September 2006 and were settled on 20 September 2006.  The husband received certain benefits which I shall detail later in this judgment. 

11. It is against that summary that the proceedings commenced before me on 22 February 2007 with the husband appearing in person.  I have, in the course of the proceedings delivered a number of ex tempore judgments arising from various applications all of which will be placed on the court file.  It is fair to say that in the lead up to the proceedings throughout 2006 the parties engaged in a number of interlocutory applications which I heard and determined.  Where necessary, judgments arising in those contested proceedings are on the court file and where appropriate to do so, I rely upon the determination made in each of them.  A number of court orders were made by me which appear on the file and it is not necessary for me to detail them further in this judgment.

12. The factual background and associated detail following the separation of the parties on 5 July 2001 is highly complex and by no measure capable of summary in short form. Accordingly, in coming to my determination, I make it quite clear that I have had regard to the various affidavits relied upon by the parties and their oral evidence before me. I do not propose to descend into the minutiae of complex detail variously described in the affidavits, the Case Outline Summaries, Exhibits and closing written submissions but rather take a more broad approach to my determination under the umbrella of the provisions of s 75(4)(a) to (c) (inclusive) and s 75(2) of the Act.

13. When the trial commenced, Mr Kirkham formulated his opening submissions around a comprehensive and helpful Case Outline Document filed prior to the commencement of the trial and in so doing provided a written summary to the husband setting out the basis upon which the wife’s case was to be argued.  It was around that outline that the evidence on behalf of the wife was presented and ultimately the schedules annexed to the written closing submissions reflected amendments so as to accord with evidence given at the hearing.  That was, in my view, a substantial and fair benefit provided to the husband as a litigant in person.

A FUNDAMENTAL APPROACH

1. There are a number of discrete issues raised on behalf of the wife by way of notional add-backs to the pool of assets and otherwise arising from what has been comprehensively termed the husband’s wastage and misuse of assets.  Particulars were spelled out with clarity by Mr Kirkham and I will address them in the course of the judgment.  Some, by definition achieve greater significance, such as the enormous outflow of funds and consequent loss and drain upon the family resources resulting from the husband’s acquisition of the A property. 

2. I will make it quite clear even at this stage of my judgment, that the husband’s purchase of the A property was a grossly self-indulgent act on his part, commercially reckless and utterly profligate in which circumstances the quantified losses arising from his actions should, in the result, be accounted for as his responsibility.  Those losses were quantified by Mr Kirkham in his closing written submissions at $1,491,004.  The overall financial circumstances that prevailed when the husband entered the transaction were such as to demonstrate and warrant the folly of its acquisition. 

3. The written closing submission on behalf of the wife, including submissions in reply, totalled some 137 pages and those of the husband, drawn in person, were about 201 pages.  Each of the parties relied upon detailed affidavits of evidence in chief and it is to be emphasised that the husband’s comprehensive trial affidavit was drawn in conference by Mr St John, Senior Counsel, who for several years preceding the hearing had been engaged by, represented and advised the husband.  Indeed, he appeared for the husband at the first trial before Bell J. 

4. This point is relevant to the fact that the husband’s closing submissions, drawn in person, were starkly criticised by Mr Kirkham, with justification, for addressing on various issues and facts that were not raised, alternatively were not challenged in evidence.  Many conclusions sought to be drawn by the husband in his submissions were simply unsustainable on the admissible evidence properly before me at trial as he sought to re-state his case by introducing matters that were never part of his application, certainly as drawn by his leading counsel. 

5. Notwithstanding discussion from time to time, the husband failed to call witnesses in circumstances where, if the issue was to be demonstrated to the requisite standard of persuasion, those witnesses ought to have been called and thus, it will be open for me to draw appropriate inferences as explained in Jones v Dunkel (1959) 101 CLR 298 at p 320 to 321 per Windeyer J. See also a consideration of the rule by the New South Wales Court of Appeal in Fabre v Arenales (1992) 27 NSWLR 437 at 449 per Mahoney JA. Furthermore, the husband has sought to introduce notional add-backs to the pool of assets of amounts that were not put to the wife in cross examination and did not form part of his case and otherwise introduce new “evidence” that did not bear part of his affidavit and was not given on oath at the hearing. 

6. In the conduct of the trial I have been alert to the guidelines set down by the Full Court in Re: F, Litigants in Person Guidelines (supra) and at the commencement of the trial provided to the husband a copy of the Headnote to the report. In my view, Mr Kirkham conducted the trial with consummate fairness, indeed, unabridged patience. His submissions in reply to those of the husband accurately, in my view, highlight the obvious problems arising from what the husband had to say and whilst proceeding without undue formality (s 97(3) of the Act), given the difficult issues for my determination and the overall circumstances and background to the trial, I will act upon evidence properly receivable before me and to the requisite standard of persuasion (s 140(1) and (2) of the Evidence Act1995 (Cth).

7. However, in so doing, I repeat that have read and considered the relevant material currently before me including the tendered exhibits.  I am mindful of the observation by Kirby J in Attorney-General for the Commonwealth of Australia and Others; Ex parte Skyring (1996) 70 ALJF 321, that:

   … [I]t is always important for every judge to keep an open mind in case a person … may have, hidden amongst the verbiage of his or her arguments, a point which has not been previously seen and which may have merit.  Vigilance, and not impatience, are especially required where that person is not legally represented.

   I also bear in mind what the High Court had to say in Neil v Nott (1994) 68 ALJR 509 at 510, namely:

   … [A] frequent consequence of self-representation is that the court must assume the burden of endeavouring to ascertain the rights of the parties which are obfuscated by their own advocacy.

8. In coming to my determination I will undertake the relevant required steps defined, for example in Ferraro v Ferraro (1993) FLC 92-335, Clauson v Clauson (1995) FLC 92-595, and JEL v DDF (2001) FLC 93-075. The issue of contribution has been agreed between the parties without demur that, given the history of the long marriage, their respective contributions pursuant to s 79(4)(a) to (c) of the Act should be regarded as equal to the time of separation.

9. One of the contentious issues I have to deal with is to quantify the pool of assets as at the date of trial nearly six years after separation being a period during which the husband had the effective control and management of the “family assets” to the exclusion of the wife.  During that time, he has variously acted with commercial recklessness and gross imprudence which I shall address in the course of this judgment.

10. In considering the pool of assets, there was contest as to the valuation of the T property and the CBD business.  They may be described as the “hard assets”.  As to the T property, although contested at trial, the husband has in his written submissions (Schedule 10) assumed its value at $6 million, which is in accordance with the evidence of Mr H, whose affidavit was filed on 22 February 2007. 

11. However, Mr Kirkham argued that the existing asset pool be “reconstituted” to include assets or property retained by the husband to be notionally added back ($6,129,985) and that of the wife ($483,997) thus increasing the pool by total notional add-backs of $6,613,982.  Further, that account be taken of the “reckless wastage” by the husband of income and assets since the date of separation amounting to $4,436,374.

12. The quantum of the “notional” add-backs was basically agreed upon by the husband, but strongly argued by him that they ought not be taken into account in the manner argued on behalf of the wife.  In the course of his submissions however, as I earlier pointed out, the husband sought to argue add-backs of his own but which, for the reasons advanced by Mr Kirkham, failed to withstand scrutiny.

13. What is clear is that at the date of separation the parties had significant assets, estimated by the wife at some $15 million and by the husband, as best I can make out from a consideration of all his evidence before me in the range of approximately $10 million.  At that point it was agreed that each had made an equal contribution to their substantial wealth and in respect of which, it is thus clear, the wife had an entitlement to one half.  As matters presently stand, and putting aside the issue of “notional” add-backs and “wastage” asserted by the wife, the pool of assets have now been assessed by her at, as I said, $3,952,335 (Schedule 1 to the written submissions).

14. For his part, and again putting aside the issue of “notional” add-backs and wastage, the husband assessed those assets at $1,306,792 (Schedule 10 to his written submissions).  Broadly speaking, the principal difference between the two sets of figures may be accounted for from:

    ·     a differing valuation of the CBD business;

    ·     a valuation accorded on behalf of the wife to the offices;

    ·     some differences between the two schedules concerning the liabilities associated with the A property and E property, and

    ·     various other liabilities, some modest chattels and other minor matters.

15. In assessing the liabilities associated with the CBD business, Mr Kirkham relied upon Schedule “O” to the husband’s trial affidavit filed 13 February 2007 before the Court (and corrected in evidence) for the purpose of the trial (p 97 of the submissions).

16. I do not see it as part of my task to investigate on my own account the figures presented by the husband in Schedule 10 of his closing submissions and attributable as liabilities to the CBD business, but rather that I act upon the evidence presented in court.  Accordingly, for the purpose of my judgment I will receive and act upon the submissions of Mr Kirkham as accurately reflecting the evidence before me of the total liabilities of the businesses (p 97 of the submissions). 

17. In short form, the wife essentially sought an order that she be entitled to retain the agreed equity in the T property of $3,700,000, furniture and effects at T property with an agreed value of $95,210 and a credit balance of some $260,354 in a CBA account.  She will otherwise be responsible for the mortgage of $2,300,000 in favour of Australian Securities Limited.  Whilst the husband drafted his proposed orders in the alternative, one of his proposals was that the wife vacate the T property within 30 days, that he pay to her the sum of $2,700,000 and that he otherwise assume responsibility for the mortgage in favour of Australian Securities Limited. 

18. Such an approach, on the face of it is somewhat risible if one were to have regard to Schedule 10 of the husband’s closing submissions, for it would mean that he would be carrying a total debt of about $18 million comprised of the following:

    The A property  5,430,000
    BR property  525,000
    E property  1,100,000
    Old business  3,140,832
    New business  1,326,285
    EN Investments Pty Ltd  605,703
    EN Company Administration                 838,989
    Australian Securities Ltd  2,300,000
    To the wife (within 30 days)               2,700,000

    17,966,809            [say $18,000,000]

    It is noteworthy as I have earlier recorded, that in Schedule O to his trial affidavit, the husband asserted that his personal nett position (excluding assets in the wife’s name) was a deficit of -$2,670,062.

19. Given the short summary thusfar, it is difficult to contemplate how a businessman who proclaims himself as having acted “prudently and responsibly in financial matters”, is “understanding of financial positions and markets” and whose “patience and acumen” resulted in the assets accumulated over the marriage (see page 2, Summary; Synopsis of the Husband’s Case) could contemplate such a commercial proposal particularly given, on his evidence at the commencement of trial, the marginal debt to equity ratio.

20. Be that as it may, I will act upon the evidence that meets the requisite standard of persuasion and bring to bear the issues argued by the parties.  However, given the history of non-disclosure and what I regard as the husband’s lack of credibility as a witness, I have been left with a lingering doubt as to whether he has, in reality, presented his true financial position.  See, for example, Giunti v Giunti (1986) FLC 91-759, Black v Kellner (1992) FLC 92-287; Weir v Weir (1993) FLC 92-338. The principles there enunciated play an important role in my determination.

THE EVIDENCE

THE WIFE

1. The evidence of the wife spanned three days and overwhelmingly demonstrated to me that she was both a reliable and honest witness.  She conducted herself with consummate dignity when cross examined by the husband and did not react to his, at times, irritating, theatrical and disrespectful presentation.  She responded to all of his questions in an earnest and direct manner and demonstrated herself to be acquainted with relevant financial and domestic issues within her own knowledge and at her command.

2. It is clear that the husband’s financial dealings post separation, particularly with the passing of the years were ones that he harboured close to his chest and the wife’s solicitors were put to the arduous task in preparation for trial of reconstructing events through the process of discovery and subpoena.  I am satisfied that the husband’s spirit of co-operation and willingness to participate in a collaborative manner was marginal.

1. I was surprised, given the clearly delineated issues for my determination, that in the course of his cross examination the husband dwelled somewhat fixatedly upon events within the marriage well prior to the date of their separation and at times appeared to underwrite a personal agenda utterly irrelevant to my determination.  I was obliged to painstakingly go to considerable lengths in order to direct him to relevant matters in issue, all of which had been clearly articulated to him by the wife’s counsel. 

2. At times the husband fell back upon the repetitive “mantra” (to adopt the noun applied by Mr Kirkham) that he was ill-equipped to conduct his own case and was out of his depth.  Such catchwords were used by him at various times in argument and when applying for an adjournment and security to fund both past and projected legal costs.  I dealt with several of these applications in the course of the trial.  I make it clear however that through his cross examination the husband demonstrated to me a generous and comprehensive understanding of the required financial and factual particulars surrounding property acquisitions and sales and all relevant matters relating to the operation of his business.  Equally so, I was left with a lingering doubt that he put before the court the true position of the business.

3. At one stage in the course of his cross examination on a certain issue when I sought clarification as to relevance, the husband maintained it went to the wife’s “credibility”, which he claimed was very much in issue in these proceedings.  That being so, there was nothing arising from his cross examination of her to suggest that she was not a credible witness, either generally or in respect of any specific issue.  To the contrary, as I said earlier, I found her to be direct, reliable and a witness upon whom I can safely rely.  There was nothing of substance alleged by the husband to persuade me she was an unreliable witness of the facts notwithstanding in the course of the trial she became the target of offensive commentary by him.  However, at the conclusion of the evidence the husband said, when asked, that he believed the wife was a “credible witness”. 

4. That position changed remarkably in the course of the husband’s closing written submissions where he launched a rancorous and sustained attack upon the wife such as to leave me in no doubt that, for the purpose of her evidence, he sought to project her as an utterly unreliable and untrustworthy witness.  I rather suspect that it was more a knee-jerk reaction to all that Mr Kirkham had to say about the husband, whose credibility was very much an issue and left in ruin. 

5. Insofar as the husband sought to attack the credibility of the wife, the following are some extravagant extracts from his written closing submissions during which he asserted that she was:

   ·     “vague”

   ·     “confused”

   ·     “inaccurate in facts and times …”

   ·     “contradicts sworn positions”

   ·     “has no credibility”

   ·     “manipulated situations”

   ·     “totally absorbed in litigation”

   ·     (undertook) “conspiratorial behaviour with her legal advisors”

   ·     (told) “demonstrable lies in her affidavits”

   ·     (that she) “blatantly” lied

   ·     (that) “the wife has done nothing more in this trial than to try and destroy the husband’s credibility.  The wife has sat back waiting for the husband to implode emotionally and financially.  The wife has not succeeded”

   ·      “conniving with her legal advisors to make the husband’s life a living nightmare”

   ·     “reckless in the abuse” of the asset base in the UK and T

   ·      “devoid of decency and credibility”

   ·     (since) “separation the wife has had a 300 week holiday …”

   ·     (unable) “to cope with reality”

   ·     “ambivalent”

   ·     (her answers in evidence were) “vague and non-specific”

   ·     (a reference to) “the intransigence and economic vandalism of the wife” when dealing with the property at G2, UK

   ·     (that) “no one could have anticipated the lemming like behaviour economic attitudes of the wife and her legal advisers.  The sort of perversity that motivated the wife’s behaviour and caused such havoc and massive losses to the parties’ UK assets is incomprehensible to the husband and similarly to the trustee”

   ·     (the wife) “blatantly misrepresented the facts”

   ·     “the wife’s assertions that the husband leads a profligate lifestyle are obscene … The wife has been on a permanent holiday … has not contributed one cent to her own maintenance”

   ·     “… the husband believes that vindictiveness and a terribly (sic) lust for revenge coupled with that advice has had a devastating effect on all members of the family …”

6. I have no hesitation in rejecting this intemperate colourful diatribe in which the husband has sought to portray the wife.  As I said, I found her to be a reliable and truthful witness.  For reasons which will be made clear when I deal with the husband’s evidence, I have no difficulty in accepting the evidence of the wife where it conflicts on material issues with that of the husband.

7. I have little doubt that the wife’s quest to gain information and be informed on a number of significant matters was an arduous one made that much more so by the husband’s failure to respond to reasonable requests for information from her solicitors and, in a number of instances, his obstructive and unforthcoming inclination. 

8. In her evidence in chief, the wife firstly set out matters of formal background, the early years of the marital history together with the history of the retail businesses operated by the husband.  She further addressed details relating to the acquisition of various properties acquired by them including the T property and what she described as “lifestyle” properties which were retained by the parties at the time of separation.  These properties included SR3, the vacant land at SR2 and the unit at BR. 

9. It was in 1988 that the parties acquired in their joint names the property at G1, UK which, she deposed, proved to be a very successful investment.  In 1995 they purchased G2, UK, the purchase price of which was wholly borrowed from the Clydesdale Bank (UK) and secured by mortgage against that property.  The wife deposed that this property, following advice, was acquired through SI Ltd and the property at G2, UK was also transferred into the name of that entity which had been incorporated in the British Virgin Islands.  The wife said that the shares were ultimately owned by WT Ltd, a professional trustee company, as trustee for the CS Trust of which the husband, the wife and the children were beneficiaries. 

10. The wife deposed that for reasons that were never explained to her, the husband utilised another offshore vehicle, namely DI Ltd to remit funds from the United Kingdom to Australia.  In fact, it did remit about $1.5 million to Australia which was recorded as a liability in the financial reports of the business.  Such, on the husband’s evidence, was correct.  I have little doubt that it was the husband that was principally involved with the various advisors in the United Kingdom in the settlement of the various offshore trusts and other entities with the underlying purpose of tax minimisation. 

11. The wife further deposed to the lifestyle of the parties during their union which, it appears to me, reflected their considerable wealth.  There was nothing put in cross examination by the husband that could dissuade me that what the wife deposed to in relation to their lifestyle and standard of living was in any way inaccurate or exaggerated.  At the time of their separation, for example the wife drove a prestige motor vehicle, the husband drove a prestige motor vehicle, the parties also owned a Range Rover and their eldest son drove a Mercedes Benz.  Two of the other children had motor vehicles as well.

12. In the course of her evidence in chief, the wife then dealt with other contributions made during the marriage which I need not set out, given the common agreement between them and the basis upon which the proceedings were conducted before me namely, that their respective contributions at the time of separation were to be regarded as equal.

13. Insofar as the wife was concerned, the marriage was a satisfactory one until in April 2001 she learned that the husband had in fact earlier travelled to the UK with a female companion, namely a Ms L who was to become quite a significant witness in the proceedings.  In the course of some commentary gratuitously offered by the husband during his evidence he indicated that, so far as he was concerned, the marriage had been an unhappy one for some time.  I need not at this stage incorporate into my judgment the role of Ms L for I will deal with her evidence later.  In the result, final separation took place between the parties on 5 July 2001 with the husband leaving the T property. 

14. In the course of her affidavit of evidence in chief, the wife set out the assets at the time of separation and which she assessed as being “worth well over $15 million”.  I propose to consider in greater detail the asset position of the parties at the time of separation as addressed by each of them in the course of their evidence before me. 

15. Following their separation, the husband made substantial provision for the support of his wife and the children which, I have no doubt, was consistent with the financial circumstances of the parties.  However, their relationship deteriorated both markedly and rapidly so that in the result, over the following years to the date of trial the husband made all decisions in relation to the family assets and dealt with the wife’s share as if it were his own.  Overall, he acted secretly and in circumstances where he failed to undertake proper discovery in accordance with what the Full Court had to say in Oriolo v Oriolo (supra). 

16. His conduct in relation to the handling and management of the “family assets” was egocentric and accompanied with varying degrees of commercial recklessness and imprudence.  The quest by the wife’s professional advisors to understand the various events and seek enlightenment of the husband’s management of the parties’ assets was obfuscated by the husband, plagued with indifference to his obligations to make full and frank disclosure and with his apathy towards certain orders of this court. 

17. In her affidavit of evidence in chief, the wife deposed that in early August 2001 the husband telephoned her and demanded she sign documents for an overdraft of up to $150,000 to be secured by the BR apartment.  With this evidence, the husband agreed.  She deposed that on 2 November 2001 he entered the T property without her knowledge and removed certain of the financial documents.  In his evidence, the husband explained that he was “frustrated” and was under pressure from the Bank of Melbourne to “produce titles”. 

18. The wife accordingly sought legal advice and on 5 November 2001 an ex parte application was made and orders made by Wilczek J in terms earlier outlined by me (par 28).  They were, on my reading in any event the sort of standard orders made by the court in circumstances such as confronted his Honour that day.  When the matter was made returnable before Frederico J on 29 November 2001, his Honour made orders by way of urgent interim spousal maintenance, child support and further ordered that the orders of 5 November 2001 continue in full force and effect.  It was noted “that the wife would not unreasonably” withhold her consent to the husband re-financing the retail business with the Bank of Bendigo provided that the refinancing did not increase the existing facility liability by more than $50,000 without her written consent. 

19. The wife then detailed various events concerning the issue of spousal and adult child maintenance.  The relationship between the parties continued to deteriorate and in the result the wife was obliged to issue interim proceedings for arrears of maintenance.  She complained that despite the orders made on 29 November 2001 and further orders on 2 May 2002, the husband’s payment of both spousal and child maintenance continued to be “irregular, unreliable and, sometimes, he did not pay at all”.  His disobedience of the court order was manifest. 

20. The wife deposed that by September 2002 the husband unilaterally reduced her periodic support and refused to pay certain of his obligations pursuant to the court orders.  As a result, she issued Contravention proceedings on 19 February 2003 and on 1 April 2003 an order was made obliging the husband to enter into a recognizance in the sum of $15,000, to be of good behaviour for 12 months from that date and (inter alia) make up arrears of maintenance in the sum of $30,802.  However, it was the wife’s position that despite repeated enforcement proceedings, the husband’s payment of maintenance as ordered continued to be “unreliable and irregular” so that by the time the first trial came on before Bell J in September 2004, the arrears amounted to approximately $16,000.  In the course of his evidence before me, the husband blandly said “I did not think there were arrears”.  I reject the husband’s evidence. 

21. In her trial affidavit, the wife dealt in detail with developments in the husband’s financial position immediately prior to and following separation.  Dealing firstly with the apartment at E, the wife deposed that in about October 2000 and unbeknownst to her, the husband entered into a commitment for the purchase of an apartment in the sum of $1.575 million to be paid upon completion of the development which was estimated to be some five years into the future.  The wife made it clear that she did not know about the transaction “at the time it was made”, and only learned about it following separation.  On the other hand, as I will detail in the course of this judgment, the husband claimed that she was at all times aware of the purchase. 

22. It was the wife’s position that it was not until she issued proceedings in November 2001 that the husband did, in fact, admit to the purchase and further, that it was several months before he produced a copy of the contract of sale.  She was required to issue subpoenas in order to obtain information. 

23. The wife deposed that, from information obtained by her, the husband signed a contract on 8 October 2000 by payment of a deposit of $150,000.  She said that the husband “apparently” borrowed $150,000 from his accountants, B Company for the deposit and which was repaid in December 2001 in circumstances unknown to her.  In April 2003 the deposit was replaced with a bank guarantee in the sum of $157,500 from the Bendigo Bank and, as far as she understood the position from documents obtained in the course of the proceedings, the original deposit was rebated back to the husband in an amount of $170,362.64, being paid into his account at the Bendigo Bank.

24. Further, as a result of documents obtained under subpoena, the wife deposed that not only had the husband acquired the property without discussion, but had gone to “considerable lengths” to hide the fact from her.  An internal file note of Phillips Fox, Solicitors and tendered in evidence recorded a conversation with Mr B that “… he will get [Mr SB] (sic) to buy unit because of [the husband’s] desire not to appear on contract”.  The nominated corporate entity for the purchase was W Company Ltd, the address of which was WT Ltd to which I have earlier referred.

25. In the course of his evidence, the husband said that the wife was aware of the contract of sale on 8 October 2000.  He claimed that separation had not been discussed at the time and that they did not live in a situation of rancour, but were “civil” to each other.  He claimed that both he and the wife had discussed with each of the children the purchase of the property.  It seems to me, that the difference between their evidence is that whilst the wife concedes the purchase of an apartment in E was “mooted” between the two of them, she was not aware that he in fact contracted the particular purchase on 8 October 2000 until after the separation.  I accept the evidence of the wife.

26. The wife next addressed the purchase by the husband of G3, UK, deposing that in late July 2001 he signed a contract for its purchase in the sum of £1.325 million.  This, as I will make clear in my judgment took place following separation and at a time when the husband, by his conduct had demonstrated that he considered the marriage to be at an end.  In the latter half of 2000 he had formed a relationship with Ms L with whom he travelled to the UK in April 2001.  The evidence of Ms L gives narrative understanding to this fact and the husband’s intent, particularly his attitude towards the wife, the marriage and his administration of the family assets.  Even using the “prevailing” exchange rate used by the wife (0.33 cents), that equates to an acquisition of approximately $4 million AUD. 

27. Despite the husband’s assertion in court that the wife was completely aware of the purchase of this property and the associated trust structure, I am satisfied that she did not and was only able to “piece” the data together from documents obtained on discovery and through the process of subpoena.  I have no doubt that the husband was not forthcoming in disclosure and that the acquisition of G3, UK was his own transaction and one in which, without consultation with the wife he secured the purchase by encumbering the substantial equity the parties had achieved in the properties at G1 and G2, UK. 

28. The wife deposed that the property G3, UK was “eventually acquired” in the name of SI Limited.  She learned that at settlement of the purchase, the husband re-financed the existing loans encumbering G1 and G2, UK properties with a Middle Eastern bank so that the totality of the parties’ borrowings, as reconstructed by her, was £1,738,750.00 (approximately, $4.347 million AUD).  Further, and resulting from a document obtained through discovery, the wife deposed that according to the settlement statement from the husband’s London solicitors, he received excess funds following settlement of £71,119.49.  She deposed that she had no knowledge as to how those funds were applied. 

29. The wife deposed that the husband had signed a credit agreement to borrow an additional £100,000 from VK Ltd, “allegedly” to pay for renovations to that property.  It appears to me, that by reason of the husband’s failure to provide proper discovery and production of documents, there is considerable support for the wife’s evidence that she had never been able to clarify whether that loan was “a paper transaction” or used for its intended purpose.  It was the wife’s understanding that the amount recommended for renovations was £50,000. 

30. The wife next dealt with the property at F which, in the result took up much court time involving also the role of Ms L.  I will later in the course of this judgment detail the financial impact of this transaction upon the parties’ assets which was quantified by Mr Kirkham at $174,930.  This, it was argued, ought be notionally added back into the pool of assets for distribution.  The husband agreed with the quantum, but vigorously opposed the add back, asserting that he did not own the F property. 

31. The wife deposed that in about February 2002 she received mail at the T property addressed to the husband as guarantor for ES Pty Ltd.  Further, that in early 2001, prior to the separation between the parties, the wife had received in the mail a deposit book and cheque books issued from the Bank of Melbourne and addressed to “The Secretary, [ES] Pty Ltd”.  Upon enquiry made by her, the wife said that the husband informed her they were sent by mistake, and that she should “throw them away”. 

32. The wife further deposed that resulting from the issue of subpoenas she learned that on 2 March 2001, ES Pty Ltd had acquired the F property for $665,000 financed as to:

    ·     a deposit of $66,500 paid by the husband;

    ·     $530,000 borrowed from the Bank of Melbourne; and

    ·     a further $69,930 paid at settlement by the husband.

1. The wife deposed that of the husband’s contribution, at least £20,000.00 was drawn from the account held by SI Ltd at the Clydesdale Bank and remitted to Australia via DI Company.  Utilising the “prevailing exchange rate” adopted by the wife for other purposes in her affidavit, that amount would equate to approximately $60,000 AUD. 

2. The wife deposed that throughout the proceedings leading up to the first trial the husband denied having any interest in ES Pty Ltd.  He also maintained that position before me.  The sole shareholder of ES Pty Ltd was Mr SB (the son of Mr B) and also a partner of B Company, the husband’s accountants.  Thus it was the wife’s case that in reality, the husband owned ES Company pointing out:

   ·     The husband signed and executed the purchase contract in his name;

   ·     The husband contributed $136,430 towards the purchase, including the amount of £20,000 drawn from SI Ltd;

   ·     The husband personally acted as a guarantor for the loan from the Bank of Melbourne to ES Pty Ltd;

   ·     Mail and loan account statements from the Bank of Melbourne were sent to the husband at the T property, addressed to “The Secretary, [ES] Pty Ltd”;

   ·     That “ES” was an acronym for “a nickname the husband used for” Ms L, namely “[…]”;

   ·     On 28 February 2001 the husband in fact executed a Statutory Declaration in which he stated he held a bona fide beneficial interest in ES Pty Ltd;

   ·     On 4 March 2001 ES Pty Ltd entered into a lease agreement with Ms L for her occupation and that the husband signed the lease agreement on behalf of ES Pty Ltd, “by power of attorney”.  That document, and such is the fact, was prepared by the husband;

   ·     On 12 March 2002 the husband executed an exclusive leasing and/or managing authority in favour of B Company, providing them authority to lease the property;

   ·     That Ms L occupied the property from about March 2001 during which time the husband paid ‘rent” to ES Pty Ltd on her behalf in the sum of $3,500 per month deposited directly into the Bank of Melbourne loan account, the loan repayments of which were also $3,500 per month; and

   ·     Following the husband’s relationship with Ms L terminating, the husband was joined at the F property by his partner Ms M, now his wife.

3. The wife next dealt with the circumstances surrounding the acquisition by the husband in March 2003 of the property at UR for $275,000.  She deposed that all information obtained was “discovered, again largely via subpoena”.  She claimed that the husband paid a deposit of $27,500 from his own resources and borrowed $220,000 from the Bendigo Bank.  It was the wife’s understanding that the property was rented and subsequently sold in July 2004 for $290,000. After discharge of the mortgage the husband received approximately $60,000 in respect of which he had never provided “a proper accounting”. 

4. The wife then addressed issues relating to SI Ltd, asserting that the transfer of their UK assets into a trust and corporate structure enabled the husband to control those assets without reference to her.  As a matter of practical reality, that proved to be the case.  In his evidence, the husband refuted that the wife did not understand the Trust structures.  The wife deposed that notwithstanding at the time of separation she had documents demonstrating that they, and more particularly the husband managed the properties during the marriage, the husband maintained:

   ·     firstly, that Mr EA acted independently of him with respect to all decisions relating to the properties including matters such as leasing and disposition;

   ·     secondly, that he could not provide requested documents relating to the properties or SI Ltd, claiming to the wife that he could only make a request of the trustee and that it was “entirely discretionary” as to whether that request would be complied with; and

   ·     that he did not have complete records of the various transactions involving SI Ltd and the UK properties.

5. I accept the evidence of the wife.  She gave, by way of example a letter from Mr EA to the husband’s solicitors advising:

   We did not agree to anything else, least of all the jurisdiction of a family court in Australia.  We do not wish to make [the husband’s] position more difficult however neither the court or [the parties] have any say over the trust or the property company and these assets are not matrimonial assets to be ruled upon by the court.

   The reality of such an assertion barely stands scrutiny when one has regard to the manner in which the husband acted unilaterally in the disposition, in particular of the properties at G1 and G2, UK.   I am satisfied that it was the husband who directed decisions and that any suggestion otherwise is mere artifice when one pays regard to the whole of the evidence.

6. The wife deposed that prior to separation and during the marriage both she and the husband handled all aspects of the properties and that the role of Mr EA was “a superficial one”.  She said that they communicated regularly and directly with the estate agents in the United Kingdom about tenancy and other matters relating to the property, and acted in concert.  All that changed once the parties had separated and I am quite satisfied that the husband acted furtively to the exclusion of the wife in his dealings with the United Kingdom assets.  I accept the evidence of the wife.

7. The wife addressed matters in contest between the parties concerning rental of those properties which became a matter in issue.  It is clear to me from the wife’s evidence that both she and her solicitors have laboured under the difficulty generated by the husband’s failure to make full and frank disclosure of all matters associated with and incidental to the UK properties following their separation.  Information was gathered, as I said, through the process of subpoena in circumstances where, had the husband been both direct and forthcoming, he was in a position to provide and/or cause to be provided all relevant documentation concerning the properties. 

8. As an example of the husband’s independent and unilateral actions, he disposed of the property at G2, UK on 30 January 2004 for £1.175 million, being substantially less than the value accorded to it in July 2001 of £1.35 million.  Despite orders of this court on 1 October 2003, which included that the wife be kept informed of the sale of that property and provided with relevant information, she was not advised of the sale until well after it had occurred.  Much of the documentation she received was incomplete.  The wife deposed that by the time of the first hearing in September 2004, the proceeds of sale had been almost entirely dissipated without any reference to her.  In his evidence before me, the husband blandly asserted it was a forced sale because they were “over extended”.  

9. The wife next dealt with the retail business of the husband which was valued at almost $3.5 million in December 2001.  The husband had deposed in an earlier affidavit at or about that time that the gross annual turnover was $3.3 million per annum.  The wife said that by early 2002 the husband had indicated that the position would change by reason of the announced closure of a CBD department store and the redevelopment of the CBD retail centre area.  The closure of the CBD department store was scheduled for July 2002 and redevelopment, expected to commence in early 2003 was to take at least two years.

10. In her evidence in chief, the wife said that the husband advised he was attempting to negotiate a new rental arrangement and was taking measures to meet the situation.  However, the wife learned that the husband had failed to meet a number of his ongoing company and business expenses and by about mid 2003 was in arrears of rent in the vicinity of $72,500.  She also learned of unpaid taxation liabilities and staff superannuation contributions and notwithstanding which the husband had committed himself to the purchase of the UR property.

11. It was in March 2004, and again without any prior notice to the wife, that the husband established a second business at the CBD retail centre (“the new [business]”) and deposed that at the first trial he gave evidence there was a “certain synergy” to owning two businesses, which was not denied in the proceedings before me.  At the time of the first trial, the wife’s evidence was that the husband had committed himself to significant debt (“allegedly to establish the new [business]”) which was in the vicinity of $2 million.  In the result, when the matter came on for hearing before Bell J, it was the husband’s evidence that the two businesses were “struggling”.

12. The wife next addressed issues concerning motor vehicles which I have earlier referred to and which I do not propose to detail in this judgment save for the broad fact that following the separation there was a rearrangement of vehicles and in April 2002 the husband sold his first prestige motor vehicle.  The wife claims that he did so without her knowledge or consent and in contravention of the orders made by the court on 29 November 2001.  There was much merit in her allegation.  She said that the husband received about $89,745 and which she understood was paid into the account of S Pty Ltd at the Bendigo Bank. 

13. The wife complained that the husband had never provided to her a proper accounting of the proceeds save to assert that he sold the vehicle to realise nett proceeds and pay all outstanding tax liabilities in respect of MM Pty Ltd.  In his affidavit in these proceedings (par 102) the husband did not deal with the prestige motor vehicle but otherwise asserted elsewhere that $57,000 of the proceeds had been used to pay tax liabilities incurred by their son S.  Accordingly, he applied the difference of $32,745 for his own purposes. 

14. The wife further deposed that in late December 2003 the husband also disposed of the other prestige and Range Rover motor vehicles in his possession contrary to the orders made on 29 November 2001.  In their stead, he acquired a brand new prestige motor vehicle for $217,697.  The purchase price was financed through a hire purchase agreement which obligated the husband to pay $2,886 per month.  The wife complained that at the time the husband made this purchase and undertook the commitment, he was pleading financial impecuniosity and at about the same time entered into onerous financial commitments without reference to her in the establishment of the new business.

15. In referring to the evidence of the wife, I do not propose to now set out those matters deposed to by her in her trial affidavit concerning Ms L which I will later consider in this judgment.

16. The wife next addressed certain issues resulting in court proceedings for injunctive relief and otherwise dealing with the husband’s contravention of orders of the court.  She deposed that in February 2002 the husband ceased servicing the business’s Bank of Melbourne overdraft facility which had, she asserted, escalated “dramatically” and without explanation.  Although she was prepared to co-operate, the wife complained that the husband delayed in the provision of documents for her signature thus placing their two properties at SR at risk, as they were held as security by the Bank.

17. The husband sought consent for the sale of the SR2 and SR3 properties.  The wife refused.  Notwithstanding however the husband, somewhat dictatorially in my view, signed a sale authority and on 19 March 2002 wrote to the wife a rather brusque letter which was annexed to her affidavit.  The wife returned to court to protect those properties and in the result the auction was cancelled.  The wife said that the husband then demanded she agree to him borrowing $1.5 million secured against the T property, failing which he would resurrect the sale of the SR2 and SR3 properties. 

18. Thus it was that on 2 May 2002 an order was made by consent for the husband to borrow $1 million from the Bendigo Bank secured over the retail business.  Pursuant to the orders, the loan was used to discharge the parties’ existing liability to the Bank of Melbourne which left the SR properties unencumbered.  On that day, orders were made restraining the husband from borrowing any monetary advance by S Pty Ltd without giving to the wife ten clear business days notice.  Injunctive orders were also made restraining the husband from selling or dealing with any assets owned by W Pty Ltd without giving to her 21 clear days notice in writing.

19. In her affidavit, the wife complained that throughout the period leading up to the first trial before Bell J in September 2004, the husband contravened orders made by the court.  She said he contravened injunctive orders made on 5 November 2001 (and 29 November 2001) restraining him from selling, alienating, encumbering or dealing with any assets in his name or owned by any of the parties’ private corporate entities.  She deposed that breaches of the order included:

    ·     the sale by the husband of the first prestige motor vehicle in April 2002;

    ·     the sale by the husband of the parties’ second prestige motor vehicle and the Range Rover motor vehicle in order to purchase the husband’s latest prestige motor vehicle in December 2003; and

    ·     the sale of UR property in July 2004.

20. The wife claimed that the orders made on 2 May 2002 were also breached.  She deposed that in March 2004 the husband established the new business thereby committing S Pty Ltd to significant liability without providing any notice to her.  Further, the husband encumbered the BR property (registered in the name of W Pty Ltd) by obtaining a loan of $100,000 from LI Pty Ltd.  He gave no notice of the transaction to the wife.  It was understood by the wife, and such is the fact, that the husband utilised $30,802 of those monies to discharge the arrears of maintenance owing by him to the wife. 

21. Again, on 1 October 2003 an order was made by consent that gave the husband liberty to place the properties at G1 and G2, UK on the market for sale.  As I have earlier said, the order provided for the wife to be given copies of all relevant documents incidental to the sale.  Pursuant to that order, the husband disposed of G2, UK on 30 January 2004 having signed the contract on 18 December 2003.  The wife did not receive the requisite Notice of Sale nor did she receive copies of relevant documents. 

22. In the course of her evidence, the wife set out what she understood the asset pool of the parties to be at the first trial before Bell J and then set out the effect of his Honour’s orders of 7 September 2004.  Having considered the evidence, his Honour ordered, in effect, that the wife retain the T property on the basis that she pay to the husband $938,404 on or before 11 November 2004.  She also transferred to the husband her shareholding in the various private corporate entities, retained the antiques at T property (save for two identified items) and that the furniture and chattels there housed and also at BR be divided equally between the parties.  The husband was otherwise to retain the remaining assets and be responsible for associated liabilities.  Those assets included the two SR properties, the BR property, the two remaining UK properties, the apartment in E, the old and the new businesses, the property at F, SI Ltd and all the funds of which the husband had the benefit since separation.  Orders were also made as to child maintenance.

23. The wife then dealt with a number of matters concerning the first trial before Bell J in August 2004, setting out both her own and the husband’s financial positions as she best understood them to be.  She complained, and with proper cause in my view given the whole of the circumstances, of the husband’s failure to make full and frank disclosure which was, to varying degrees maintained throughout the duration of the proceedings thus rendering it necessary for her solicitor to seek enforcement, alternatively, understanding through the process of subpoena.

24. Since that time the wife has been obliged to borrow an interest only loan from Australian Securities Ltd in three tranches, the first on 10 November 2004 and the remaining two on 30 March 2006 and 30 August 2006 achieved only by order of the court.  The total of the loan now stands at $2.3 million.  As I have said, it is the wife’s position that $938,404 was drawn to meet the order of Bell J made on 8 September 2004 and the balance to meet forensic accounting costs, legal costs and disbursements and day to day living and sundry expenses. 

25. In relation to the third tranche, the husband filed an application on 17 July 2006 seeking (inter alia) that he be permitted to obtain an interest only loan of up to $2.2 million secured against the title to the T property.  On the eve of the adjourned hearing he withdrew his application in circumstances where he had, clearly in my view, misled the court.  I propose to deal more with this particular aspect later in the course of my judgment.

26. The wife deposed that it has been difficult for her to assess the husband’s financial position as at the date of her affidavit of evidence in chief.  The husband’s circumstances changed considerably since the hearing before Bell J and notwithstanding, it is the wife’s constant complaint that he failed to make full and frank disclosure of his changed position or to provide to her supporting documents.  Thus, she was obliged to undertake enquiries and issue subpoenas.  There have been a number of affidavits filed by her solicitor dealing with this issue.

27. The wife deposed that at the hearing of her application for a stay of the orders on 8 October 2004 the husband gave an undertaking through his counsel that he would give to her “at least 14 days notice” if he intended selling, encumbering or otherwise dealing with the assets in his ownership following the orders of Bell J.  She relied upon a letter from the husband’s solicitors dated 5 November 2004 to her solicitors in the course of which the following representation was made:

    We also note that at Court the respective counsel representing the parties had informal discussions concerning the parties selling, encumbering or otherwise dealing with the parties’ assets pending the appeal.  We confirm the husband’s undertaking given through his counsel that he will give at least 14 days notice to the wife if he intends to sell, encumber or otherwise deal with the assets now under his ownership.  We would request that the wife give to the husband a similar undertaking.  We believe that these undertakings are preferable to and forestall any Court application which the parties may otherwise fell they need to make with the consequent expenses which would be involved. 

    [My emphasis]

28. The representation made was good common sense and it was an “undertaking” upon which the wife drew comfort and which she acted upon.  The issue of whether the representation made by the husband’s solicitor in his letter of 5 November 2004 was in fact an “undertaking”, in the sense known in law, was in contest.  However, whatever the position and about which I have more to say later in this judgment, the least that could be understood is that it was a warrant or representation made on behalf of the husband and upon which the wife acted in good faith. 

29. A central feature in these proceedings has been the acquisition by the husband, as I have earlier outlined, of the A property on 19 January 2005.  The wife deposed that the property consisted of two titles, being SR1B comprising a dwelling and SR1A comprising of a tennis court.  She deposed that the husband paid $4.15 million for the dwelling and $2.33 million for the tennis block being a total purchase price of almost $6.5 million.  She complained, and given the history of the circumstances, with good cause that it had been “exceedingly” difficult for her to ascertain the overall details of the purchase of this property.  She asserted that the husband provided her with “absolutely no documentation and very little information” with the result that most of the material that she obtained she did so by the issuing subpoenas. I accept the wife’s evidence.

1. I have dealt extensively with the husband’s credibility and, as I have made perfectly clear and predicated upon a solid raft of reliable evidence built on fact, he is not a witness upon whom I can rely at all.  By contrast the wife is a reliable and honest witness.

2. The wife has for approximately six years following separation been the primary carer for the children and led them through a number of emotional crises.  In so doing she has relieved the husband of that obligation (see Ferraro v Ferraro (1993) FLC 92-335) and made a post separation contribution (see Williams v Williams (1984) FLC 91-541).

3. As Mr Kirkham submitted, the husband has, post separation dealt unilaterally with the property of the parties as follows:

   ·On 23 July 2001 he purchased and over-geared the property at G3, UK.  He did so by encumbering the other two London properties which had been acquired by the parties during their long union;

   ·On 27 December 2003 he contracted to lease a prestige motor vehicle for $217,697 upon which he has made interest payments totalling $112,554;

   ·On 18 December 2003 he sold the property at G2, UK at a loss on a forced sale;

   ·In March 2004 he commenced the second retail business being his decision alone without advice or consultation;

   ·On 19 January 2005, being four months after the first trial and when business debts were described as a “yawning chasm” and with profits “nose-diving”,  the husband contracted to purchase A property for $6.5 million.  In the result, he borrowed $5.53 million to do so.  The acquisition and interest costs alone amounted to $1,148,113. 

   ·On 20 March 2005 he sold the SR3 property and used either $250,000 or $150,000 towards the acquisition of A property;

   ·In April 2005 he secured the sum of $400,000 on the BR apartment to assist in the purchase of the A property;

   ·On 6 October 2005 he settled the purchase of SR1B (“the house block at the A property”);

   ·On 17 January 2006 he sold the property at G3, UK and used some $600,000 towards the acquisition of the A property;

   ·On 25 March 2006 he sold the property at SR2; and

   ·On 15 June 2006, with increasing debts not being serviced and interest accruing on the debts by reason of interest charges on the borrowings for the purchase of the A property, the husband disposed of the property at G1, UK in covert circumstances and applied $570,000 towards the A property and $300,000 towards the apartment at E. 

4. I accept the submission of Mr Kirkham that what the husband had essentially done was to sell all of the parties’ formerly income producing properties and utilise the proceeds of three of those properties to purchase the A property for $6.5 million. This involved a total borrowing of $5.3 million in the process.  It appears that he utilised from the sale of those properties the sum of $570,000 from the disposition of the property at G1, UK, the sum of $600,000 from the disposition of G3, UK, and $250,000 (or $150,000) from the disposition of the property at SR3  being a total of $1,420,000 (or $1,520,000).  In so doing, he encumbered the BR apartment in an amount of $400,000 to provide further funds for the acquisition of the property which he, early in the proceedings, described as his “weekender”. 

5. Until the loans were re-financed in October 2006, the husband was paying $33,000 a month by way of interest payments which he agreed would extend to $55,000 a month in May 2007.  Thus it was that six months interest from October 2006 alone amounted to $339,375. 

6. In my view, it was both arguable and appropriate to present the wife’s submissions as opened at the commencement of the hearing and adopted, save where varied in accordance with the evidence during the course of the trial, in the closing submissions.  However, I would not see it as really appropriate to add-back items such as:

   ·     The sum of $32,745 relating to the first prestige motor vehicle  and referred to in Schedule 2 paragraph 1, which is now aged in time;

   ·     The sum of $66,500 relating to the acquisition and sale of the UR property referred to in Schedule 2 paragraph 2 and Schedule 3 paragraph 9;

   ·     The sum of $30,802 being the loan from LI Pty Ltd secured over the BR property and utilised to pay arrears of maintenance referred to Schedule 2 par 12;

   ·     The sum of $21,800 being jewellery acquired through HM Pty Ltd and referred to in Schedule 3 par 11.

7. Furthermore, I do not see it as being appropriate to add-back in a commercial sense the total sum of $125,302 being travel and sundry expenses of the husband referred to in Schedule 3 paragraph 12.  That does no more than demonstrate excessive spending on his part and in support of his lifestyle as submitted by Mr Kirkham.  The monies expended in 2005 and 2006 on travel were certainly excessive and irresponsible if one were to accept the husband’s assertion of the straitened financial circumstances under which he was suffering during that period of time.  Further, I do not see it as appropriate to add-back in a numerical sense the total sum of $77,859 (Schedule 2, paragraph 10) expended by the husband in the pursuit of his relationship with Ms L which is now a matter of history.  However, each of those items may be brought into account in an overall general way demonstrating the lifestyle pursuit of the husband during a period of time in which he was complaining about his difficult financial position and hardship in meeting payments of maintenance and support for his family. 

8. Finally, I would not see it as appropriate to bring back into account the total repayments made by the husband pursuant to the lease of the prestige motor vehicle and totalling, in all, $112,554 (Schedule 3 paragraph 1).  That was in part written down through the husband’s business expenses.  In any event, it is open to comment that the acquisition and display of such a luxury vehicle is evidence of the husband’s “lifestyle” and does not sit all that satisfactorily with his assertion concerning his necessitous financial situation.  A more prudent investment may have been achieved through the acquisition of a more common vehicle.

9. It is the sum total otherwise of the husband’s behaviour post separation in dealing with the parties’ wealth in the more major and dominant transactions overall and in the circumstances I have clearly laid out in this judgment that underpins the submissions of Mr Kirkham and indeed, my approach to the issue.  This includes:

   1.The acquisition of the apartment at E was solely the decision of the husband and in respect of which the wife played no part.  In the result, it is evident that the husband incurred penalty interest for late settlement in the sum of $34,650 and there is a loss on the investment, having regard to the purchase price and the valuation as at February 2007 of $200,000.  Further, that the deposit paid from the resources of the parties was ultimately returned to the husband and replaced by a guarantee via the Bendigo Bank.  The total sum involved was $170,363, of which the husband has had the use.

   2.The acquisition by the husband of the property at F involved considerable evidence.  In the result, I am satisfied that the husband expended a total of $174,930 in relation to that property constituted by a deposit paid by him of $66,500, a further amount of $69,930 at settlement and otherwise the “rent” paid when the husband was living elsewhere in the sum of $38,500. 

   3.The property at G2, UK, formerly owned by the parties prior to separation was disposed of in December 2003 and in respect of which the husband received and utilised a total of about $930,875.  Furthermore, it is plain that at the time of separation it was valued at £1.325 million and when sold, was disposed of for £1,175,000, being a loss of £150,000.  As the husband said in his evidence, he could not service the loans anymore as a result of which he disposed of that property.  Accordingly, at a conversion rate of 0.40AUD the loss equated to some $375,000 AUD.

   4.The property at G3, UK was purchased by the husband at his own initiative without consultation with the wife. I am satisfied that the amount borrowed and spent on renovations and acquisition costs totalled £225,000, which converted at 0.40 is $562,500 AUD.  The purchase price was £1.325 million. It was sold in January 2006 for £1.294 million being a loss of £31,000 (at 0.40 conversion) or $77,500 AUD.  The selling costs of the property were £45,799 which converted at the same rate amounts to $114,498 AUD.  I am satisfied that the total interest repayments on the loan, less rental (see Exhibit “W27”) was $896,039.  The husband received and utilised the nett proceeds of sale which amounted to $852,745.

   5.The property at G1, UK was owned by the parties at the time of separation.  The husband received the nett proceeds of sale of $1,349,133.  The approximate selling costs were £71,960 (and converted at 0.40) amounted to $179,900. 

   6.The property at SR3 was unencumbered and owned by the parties at the time of separation. It was sold in April 2005 and the nett proceeds of $476,936 were retained by the husband.  It was argued on behalf of the wife that the agreed value at the trial in 2004 was $870,000.  It was sold for $810,000 thus resulting in a loss of $60,000.  It was claimed that the husband was obliged to sell that property to meet his commitments.

   7.The property at SR2 was owned by the parties and unencumbered at the time of separation.  This too was sold by the husband with a loss on sale of $55,000.  The husband had the advantage of the proceeds of sale of $310,000.

   8.I have earlier in this judgment dealt at length with the acquisition by the husband of the A property.  Dealing firstly with SR1B the total amounts drawn by the husband for the deposit, stamp duty and acquisition costs, chattels and interest repayments totalled $879,099.  As to SR1A, the stamp duty on acquisition and the total acquisition costs amounted to $400,530.  The interest pre-paid by the husband to May 2007 was $339,375.  The total monies expended by the husband for the acquisition of the A property was $1,491,004.

10. It is clear to me that it was the husband who dealt with the family assets accumulated by his wife and himself through their joint efforts over more than 34 years.  In the result, and for the reasons set out in this judgment, the “hard assets” as I have called them now bear only part of their wealth as at the time of separation and less than the wife’s agreed share at that time.  It is the husband who made the decisions concerning the parties’ wealth.  As I said, he did so without consultation with the wife or her advisors.  In some instances, he did so recklessly and without commercial prudence.  In other instances his actions were unreasonable.  He has acted to obfuscate discovery and failed abysmally in the requirement imposed upon him to make full and frank disclosure.  I have made many findings in this judgment concerning his conduct and in relation to his credibility.  It is the cumulative effect of all these matters that underpins my approach to the Orders I propose to make.

11. The financial position of the parties altered in a decidedly obvious fashion following their separation as revealed to me over the trial of the proceedings.  What is quite clear is that at the time of separation there is credible evidence that the parties had an equity of about $4,500,000 in the two properties at G1 and G2, UK acquired by them during their union before the husband settled upon the acquisition of G3, UK by borrowing the whole of the purchase price, acquisition costs and costs of renovation using those two properties as additional security.

12. The husband contracted the purchase of G3, UK on 23 July 2001.  This, I am satisfied from all the evidence I have heard was a journey of his own.  It was his decision and resolve that determined the purchase without consultation with or approval of the wife and at a time when the parties had separated.  Their marriage was in disarray. Even upon the fair assumption that there must have been dialogue between the husband and the vendor prior to 23 July 2001, that would have, on his evidence taken place when, from his perspective, the marriage was an unhappy one, particularly given for example, his relationship with Ms L and their UK journey together in April 2001. 

13. I accept the wife’s evidence that knowledge obtained by her in relation to this acquisition was achieved through the process of discovery.  No information was volunteered, nor offered.  In her evidence in chief the wife endeavoured to piece together the details of this acquisition through discovered documents. 

14. In his affidavit, the husband deposed that the purchase price was £1.325 million and that a loan of £1.425 million was obtained to meet that price and associated costs.  An additional £100,000 was borrowed to fund renovations.  The total costs thus incurred amounted to £1.525 million in all (at 0.33 is equivalent to approximately $4,620,000 AUD). This purchase was effected when an assessment of value had been provided that G3, UK was valued at £1.275 million (See Exhibit “H2”).

15. On the basis that the asset pool be notionally re-constituted by bringing into account the two UK properties the total assets would amount to about $8,500,000 and what the wife seeks by way of orders of this court represents 46.5 per cent of that sum.  She is entitled to more. No matter how one re-constitutes the pool of assets having regard to the husband’s financial conduct, his improvidence and recklessness post separation, the “notional” entitlement of the wife can not be achieved.  Even if one were to simply argue that at the time of separation and on the most conservative assessment of the family’s total wealth, the wife had an entitlement to at least $5,000,000 this is still greater than the total “hard assets” which I have identified.  It is the husband that has dealt with the wife’s entitlement in the manner that I have found and ultimately brought about the current calamitous state. 

16. I am very much aware of the fact that to add back monies “reasonably” disposed of ought be the exception and not the rule and that one should be most careful in any event.  However, in the circumstances before me that is not the case.  The husband’s conduct and attitude has been far from reasonable. It is also a difficult, perhaps impossible exercise to audit all of his financial dealings and it is for that reason that I take a broad approach and not be deflected by “addbacks” of modest nature.  The overall picture is clear and wholly supports my ultimate determination.

17. For the reasons I have explained and upon the findings I have carefully made, it is, in my view and upon the exercise of my discretion appropriate to make the orders sought by the wife.  I appreciate its impact upon the husband (utilising step 4 of the process) but it is in my view, in the unusual circumstances prevailing and with which I am presented, a proper Order to make.

18. As a matter of formality, I point out that the second step in the determination exercise obliges me to make an evaluation of what contributions have been made by the parties including direct and indirect contributions of a financial character and non-financial character and contributions to the welfare of the family including contributions as homemaker and parent within s 79(4)(a) to (c) of the Act, inclusive. Given the approach of the parties to these proceedings, it is unnecessary for me to do so.

19. The third step in the process obliges me to consider the matters, so far as relevant, referred to in s 75(2) of the Act, picked up by the terms of s 79(4)(e), namely the circumstances which relate to the present and future needs of the parties and to their means, resources and earning capacity, both actual and potential.

20. The provisions of s 75(2) of the Act do not apply automatically but only where, and to the extent to which they are relevant. I am mindful of the fact that the various paragraphs of that section of the Act come into play and are to be given appropriate weight when it is considered that they are relevant to making a property order between the parties which is both just and equitable. The same test applies to other paragraphs of s 79(4) of the Act.

21. When considering the various paragraphs of s 75(2) I must be satisfied that the particular paragraphs of that sub-section are relevant in arriving at a just and equitable result. This is a subjective exercise on my part. However, and realistically given the orders I propose to make in relation to the re-constituted pool of assets, this too is somewhat of a notional consideration. In the course of his written submissions, Mr Kirkham said that the wife cannot be expected to work at her age and with her lack of skill will require financial support for the rest of her life. I agree with that submission.

22. It is clear that the wife in the fullness of time be required to sell the T property and discharge the mortgage in favour of Australian Securities Ltd.  This will be at her own expense for the issue of associated costs of sale was not argued.  There will then be the cost of purchase of a replacement home (including stamp duty) and one clearly of a much lesser value.  She will be required to carefully invest the residue for her support.  Given her age and statistical lifespan.  That I suspect this will be a daunting task and her future, in this regard, may well be a difficult one.

23. The husband will continue to work and has the opportunity to rebuild the businesses.  He has given evidence to this effect, at least to the year 2008.  I would suspect it will be longer.  He has considerable experience as a small business retailer and although I suspect it will not be an easy journey for him, he has the opportunity to re-order his financial situation which may include the sale of the E apartment and the A property.  However that is a matter for him.  He has the capacity to command a substantial income, which the wife does not.  The expert witnesses forecast a positive future in relation to the businesses, but this will demand from him a substantial and sustained effort.

24. In the result, given my approach in dealing with the available pool of assets, I do not propose to make any adjustment either way pursuant to s 75(2) of the Act.

25. For the reasons set out herein, I therefore order:-

    1. That within 7 days of the date of these orders, the husband do all such acts and sign all such documents as may be necessary to discharge caveat No. […] and any other encumbrance registered by him or on his behalf against the Title of the property situate at and known as [T]in the State of Victoria.

2. That the husband be solely liable for and indemnify the wife and/or any of the children of the marriage, namely [S] born [in] June 1974, [D] born [in] February 1977, [C] born [in] March 1981 and [N] born [in] March 1983, against any liability incurred as a result of their involvement in any of the husband’s private corporate entities including:

2.1[S] Pty Ltd;

2.2[W] Pty Ltd;

2.3[EN] Investments Pty Ltd; and

2.4[EN] Nominees Pty Ltd.

3. That unless otherwise specified by these orders and except for the purposes of enforcing the payment of any monies due under these or any subsequent orders, each party retain to the exclusion of the other all real and personal property in the possession of that party as at the date of these orders.

4. That each party be solely liable for and indemnify the other against any liability encumbering any item or property to which that party is entitled pursuant to these orders.

5. That all questions of costs arising from the orders made this day be reserved and be brought on upon reasonable notice given in writing to the other party.

6. That all extant applications be dismissed AND THAT the proceedings be removed from the Active Pending List of Cases.

7. IT IS CERTIFIED THAT pursuant to Rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of Senior Counsel.

I certify that the preceding five hundred and twenty-nine (529) numbered
 paragraphs are a true copy of the
reasons for judgment herein of
the Honourable Justice Guest.




Acting Associate to Guest J

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Honourable Justice Guest  delivered this day will for all publication and reporting purposes be referred to as ON & ON